Correlation Between Legg Mason and Vy(r) Blackrock

Can any of the company-specific risk be diversified away by investing in both Legg Mason and Vy(r) Blackrock 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 Legg Mason and Vy(r) Blackrock into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Legg Mason Partners and Vy Blackrock Inflation, you can compare the effects of market volatilities on Legg Mason and Vy(r) Blackrock 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 Legg Mason with a short position of Vy(r) Blackrock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Vy(r) Blackrock.

Diversification Opportunities for Legg Mason and Vy(r) Blackrock

0.96

Correlation Coefficient

Legg Mason  Vy(r) Blackrock

Almost no diversification

The 3 months correlation between Legg and Vy(r) is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Vy Blackrock Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vy Blackrock Inflation and Legg Mason 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 Legg Mason Partners are associated (or correlated) with Vy(r) Blackrock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vy Blackrock Inflation has no effect on the direction of Legg Mason i.e., Legg Mason and Vy(r) Blackrock go up and down completely randomly.

Pair Corralation between Legg Mason and Vy(r) Blackrock

Assuming the 90 days trading horizon Legg Mason Partners is expected to generate 0.62 times more return on investment than Vy(r) Blackrock. However, Legg Mason Partners is 1.61 times less risky than Vy(r) Blackrock. It trades about 0.41 of its potential returns per unit of risk. Vy Blackrock Inflation is currently generating about 0.19 per unit of risk. If you would invest  619.00  in Legg Mason Partners on May 18, 2025 and sell it today you would earn a total of  25.00  from holding Legg Mason Partners or generate 4.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Legg Mason Partners  vs.  Vy Blackrock Inflation

Legg Mason Partners

Risk-Adjusted Performance

High

Compared to the overall equity markets, risk-adjusted returns on investments in Legg Mason Partners are ranked lower than 32 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Legg Mason is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Vy Blackrock Inflation

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vy Blackrock Inflation are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Vy(r) Blackrock is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Legg Mason and Vy(r) Blackrock

The main advantage of trading using opposite Legg Mason and Vy(r) Blackrock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Vy(r) Blackrock 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 Vy(r) Blackrock will offset losses from the drop in Vy(r) Blackrock's long position.

The idea behind Legg Mason Partners and Vy Blackrock Inflation 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.

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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.