Correlation Between Gurtin California and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Gurtin California and Legg Mason at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Gurtin California and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gurtin California Muni and Legg Mason Bw, you can compare the effects of market volatilities on Gurtin California and Legg Mason and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Gurtin California with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gurtin California and Legg Mason.
Diversification Opportunities for Gurtin California and Legg Mason
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gurtin and Legg is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Gurtin California Muni and Legg Mason Bw in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Bw and Gurtin California is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Gurtin California Muni are associated (or correlated) with Legg Mason. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legg Mason Bw has no effect on the direction of Gurtin California i.e., Gurtin California and Legg Mason go up and down completely randomly.
Pair Corralation between Gurtin California and Legg Mason
Assuming the 90 days horizon Gurtin California Muni is expected to generate 0.54 times more return on investment than Legg Mason. However, Gurtin California Muni is 1.84 times less risky than Legg Mason. It trades about 0.32 of its potential returns per unit of risk. Legg Mason Bw is currently generating about 0.17 per unit of risk. If you would invest 986.00 in Gurtin California Muni on May 28, 2025 and sell it today you would earn a total of 17.00 from holding Gurtin California Muni or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gurtin California Muni vs. Legg Mason Bw
Performance |
| Timeline |
| Gurtin California Muni |
| Legg Mason Bw |
Gurtin California and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gurtin California and Legg Mason
The main advantage of trading using opposite Gurtin California and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gurtin California position performs unexpectedly, Legg Mason can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Legg Mason will offset losses from the drop in Legg Mason's long position.| Gurtin California vs. Gurtin California Municipal | Gurtin California vs. Gurtin National Muni | Gurtin California vs. Gurtin National Municipal | Gurtin California vs. Prudential Jennison Small |
| Legg Mason vs. Lord Abbett Convertible | Legg Mason vs. The Gamco Global | Legg Mason vs. Absolute Convertible Arbitrage | Legg Mason vs. Virtus Convertible |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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