Correlation Between Clipper Fund and Longleaf Partners
Can any of the company-specific risk be diversified away by investing in both Clipper Fund and Longleaf Partners 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 Clipper Fund and Longleaf Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clipper Fund Inc and Longleaf Partners Fund, you can compare the effects of market volatilities on Clipper Fund and Longleaf Partners 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 Clipper Fund with a short position of Longleaf Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clipper Fund and Longleaf Partners.
Diversification Opportunities for Clipper Fund and Longleaf Partners
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CLIPPER and Longleaf is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Clipper Fund Inc and Longleaf Partners Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longleaf Partners and Clipper Fund 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 Clipper Fund Inc are associated (or correlated) with Longleaf Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longleaf Partners has no effect on the direction of Clipper Fund i.e., Clipper Fund and Longleaf Partners go up and down completely randomly.
Pair Corralation between Clipper Fund and Longleaf Partners
Assuming the 90 days horizon Clipper Fund Inc is expected to generate 1.02 times more return on investment than Longleaf Partners. However, Clipper Fund is 1.02 times more volatile than Longleaf Partners Fund. It trades about 0.09 of its potential returns per unit of risk. Longleaf Partners Fund is currently generating about 0.07 per unit of risk. If you would invest 10,403 in Clipper Fund Inc on August 30, 2024 and sell it today you would earn a total of 5,150 from holding Clipper Fund Inc or generate 49.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clipper Fund Inc vs. Longleaf Partners Fund
Performance |
| Timeline |
| Clipper Fund |
| Longleaf Partners |
Clipper Fund and Longleaf Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clipper Fund and Longleaf Partners
The main advantage of trading using opposite Clipper Fund and Longleaf Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clipper Fund position performs unexpectedly, Longleaf Partners 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 Longleaf Partners will offset losses from the drop in Longleaf Partners' long position.| Clipper Fund vs. Value Fund Value | Clipper Fund vs. Meridian Trarian Fund | Clipper Fund vs. Longleaf Partners Fund | Clipper Fund vs. Mairs Power Growth |
| Longleaf Partners vs. Versatile Bond Portfolio | Longleaf Partners vs. California Bond Fund | Longleaf Partners vs. Barings Active Short | Longleaf Partners vs. Astor Longshort Fund |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |