Correlation Between Carlyle and Legg Mason

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Can any of the company-specific risk be diversified away by investing in both Carlyle 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 Carlyle and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Group and Legg Mason, you can compare the effects of market volatilities on Carlyle 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 Carlyle with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and Legg Mason.

Diversification Opportunities for Carlyle and Legg Mason

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Carlyle and Legg is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Legg Mason in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason and Carlyle 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 Carlyle Group 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 has no effect on the direction of Carlyle i.e., Carlyle and Legg Mason go up and down completely randomly.

Pair Corralation between Carlyle and Legg Mason

If you would invest  2,808  in Carlyle Group on December 30, 2023 and sell it today you would earn a total of  1,883  from holding Carlyle Group or generate 67.06% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Carlyle Group  vs.  Legg Mason

 Performance 
       Timeline  
Carlyle Group 

Risk-Adjusted Performance

12 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Carlyle Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting technical and fundamental indicators, Carlyle reported solid returns over the last few months and may actually be approaching a breakup point.
Legg Mason 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Legg Mason has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Legg Mason is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Carlyle and Legg Mason Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Carlyle and Legg Mason

The main advantage of trading using opposite Carlyle and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle 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.
The idea behind Carlyle Group and Legg Mason pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Global Correlations module to find global opportunities by holding instruments from different markets.

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