Correlation Between Great West and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Great West 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 Great West and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Inflation Protected Securities and Legg Mason Partners, you can compare the effects of market volatilities on Great West 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 Great West with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great West and Legg Mason.
Diversification Opportunities for Great West and Legg Mason
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Great and Legg is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Great West Inflation Protected and Legg Mason Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Partners and Great West 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 Great West Inflation Protected Securities 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 Partners has no effect on the direction of Great West i.e., Great West and Legg Mason go up and down completely randomly.
Pair Corralation between Great West and Legg Mason
Assuming the 90 days horizon Great West is expected to generate 1.11 times less return on investment than Legg Mason. In addition to that, Great West is 1.12 times more volatile than Legg Mason Partners. It trades about 0.32 of its total potential returns per unit of risk. Legg Mason Partners is currently generating about 0.4 per unit of volatility. If you would invest 625.00 in Legg Mason Partners on June 10, 2025 and sell it today you would earn a total of 25.00 from holding Legg Mason Partners or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great West Inflation Protected vs. Legg Mason Partners
Performance |
| Timeline |
| Great West Inflation |
| Legg Mason Partners |
Great West and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great West and Legg Mason
The main advantage of trading using opposite Great West and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great West 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.| Great West vs. Great West Securefoundation Balanced | Great West vs. Great West Lifetime 2020 | Great West vs. Great West Lifetime 2020 | Great West vs. Great West Lifetime 2020 |
| Legg Mason vs. Vanguard Total Stock | Legg Mason vs. Vanguard 500 Index | Legg Mason vs. Vanguard Total Stock | Legg Mason vs. Vanguard Total Stock |
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 Stocks Directory module to find actively traded stocks across global markets.
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