Correlation Between Global Real and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Global Real 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 Global Real and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Real Estate and Legg Mason Partners, you can compare the effects of market volatilities on Global Real 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 Global Real with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Real and Legg Mason.
Diversification Opportunities for Global Real and Legg Mason
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and Legg is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Global Real Estate 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 Global Real 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 Global Real Estate 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 Global Real i.e., Global Real and Legg Mason go up and down completely randomly.
Pair Corralation between Global Real and Legg Mason
Assuming the 90 days horizon Global Real Estate is expected to generate 3.73 times more return on investment than Legg Mason. However, Global Real is 3.73 times more volatile than Legg Mason Partners. It trades about 0.05 of its potential returns per unit of risk. Legg Mason Partners is currently generating about 0.08 per unit of risk. If you would invest 2,642 in Global Real Estate on March 23, 2025 and sell it today you would earn a total of 98.00 from holding Global Real Estate or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Real Estate vs. Legg Mason Partners
Performance |
| Timeline |
| Global Real Estate |
| Legg Mason Partners |
Global Real and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Real and Legg Mason
The main advantage of trading using opposite Global Real and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Real 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.| Global Real vs. Rbc Short Duration | Global Real vs. Delaware Investments Ultrashort | Global Real vs. Blackrock Global Longshort | Global Real vs. Catholic Responsible Investments |
| Legg Mason vs. Short Real Estate | Legg Mason vs. Simt Real Estate | Legg Mason vs. Global Real Estate | Legg Mason vs. Invesco Real Estate |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Stocks Directory Find actively traded stocks across global markets |