Correlation Between Tax-managed International and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Tax-managed International 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 Tax-managed International and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tax Managed International Equity and Legg Mason Partners, you can compare the effects of market volatilities on Tax-managed International 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 Tax-managed International with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tax-managed International and Legg Mason.
Diversification Opportunities for Tax-managed International and Legg Mason
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tax-managed and Legg is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Tax Managed International Equi 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 Tax-managed International 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 Tax Managed International Equity 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 Tax-managed International i.e., Tax-managed International and Legg Mason go up and down completely randomly.
Pair Corralation between Tax-managed International and Legg Mason
Assuming the 90 days horizon Tax Managed International Equity is expected to generate 1.54 times more return on investment than Legg Mason. However, Tax-managed International is 1.54 times more volatile than Legg Mason Partners. It trades about 0.1 of its potential returns per unit of risk. Legg Mason Partners is currently generating about 0.11 per unit of risk. If you would invest 1,389 in Tax Managed International Equity on September 9, 2025 and sell it today you would earn a total of 60.00 from holding Tax Managed International Equity or generate 4.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tax Managed International Equi vs. Legg Mason Partners
Performance |
| Timeline |
| Tax-managed International |
| Legg Mason Partners |
Tax-managed International and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tax-managed International and Legg Mason
The main advantage of trading using opposite Tax-managed International and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tax-managed International 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.| Tax-managed International vs. Transamerica Growth I | Tax-managed International vs. Emerging Markets Fund | Tax-managed International vs. Transamerica Growth A | Tax-managed International vs. Dfa Small |
| Legg Mason vs. Omni Small Cap Value | Legg Mason vs. Principal Lifetime Hybrid | Legg Mason vs. Fidelity Advisor Diversified | Legg Mason vs. Semiconductor Ultrasector Profund |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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