Correlation Between Auer Growth and Clearbridge Small
Can any of the company-specific risk be diversified away by investing in both Auer Growth and Clearbridge Small 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 Auer Growth and Clearbridge Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auer Growth Fund and Clearbridge Small Cap, you can compare the effects of market volatilities on Auer Growth and Clearbridge Small 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 Auer Growth with a short position of Clearbridge Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auer Growth and Clearbridge Small.
Diversification Opportunities for Auer Growth and Clearbridge Small
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Auer and Clearbridge is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Auer Growth Fund and Clearbridge Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Small Cap and Auer Growth 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 Auer Growth Fund are associated (or correlated) with Clearbridge Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Small Cap has no effect on the direction of Auer Growth i.e., Auer Growth and Clearbridge Small go up and down completely randomly.
Pair Corralation between Auer Growth and Clearbridge Small
Assuming the 90 days horizon Auer Growth is expected to generate 1.03 times less return on investment than Clearbridge Small. In addition to that, Auer Growth is 1.01 times more volatile than Clearbridge Small Cap. It trades about 0.05 of its total potential returns per unit of risk. Clearbridge Small Cap is currently generating about 0.05 per unit of volatility. If you would invest 5,525 in Clearbridge Small Cap on August 29, 2024 and sell it today you would earn a total of 1,721 from holding Clearbridge Small Cap or generate 31.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auer Growth Fund vs. Clearbridge Small Cap
Performance |
| Timeline |
| Auer Growth Fund |
| Clearbridge Small Cap |
Auer Growth and Clearbridge Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auer Growth and Clearbridge Small
The main advantage of trading using opposite Auer Growth and Clearbridge Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auer Growth position performs unexpectedly, Clearbridge Small 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 Clearbridge Small will offset losses from the drop in Clearbridge Small's long position.| Auer Growth vs. Lebenthal Lisanti Small | Auer Growth vs. Hodges Small Cap | Auer Growth vs. Schwartz Value Focused | Auer Growth vs. Oberweis Small Cap Opportunities |
| Clearbridge Small vs. Ab High Income | Clearbridge Small vs. Franklin High Income | Clearbridge Small vs. Needham Aggressive Growth | Clearbridge Small vs. Pace High Yield |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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