Correlation Between Chestnut Street and Clearbridge Sustainability
Can any of the company-specific risk be diversified away by investing in both Chestnut Street and Clearbridge Sustainability 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 Chestnut Street and Clearbridge Sustainability into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chestnut Street Exchange and Clearbridge Sustainability, you can compare the effects of market volatilities on Chestnut Street and Clearbridge Sustainability 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 Chestnut Street with a short position of Clearbridge Sustainability. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chestnut Street and Clearbridge Sustainability.
Diversification Opportunities for Chestnut Street and Clearbridge Sustainability
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chestnut and Clearbridge is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Chestnut Street Exchange and Clearbridge Sustainability in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Sustainability and Chestnut Street 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 Chestnut Street Exchange are associated (or correlated) with Clearbridge Sustainability. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Sustainability has no effect on the direction of Chestnut Street i.e., Chestnut Street and Clearbridge Sustainability go up and down completely randomly.
Pair Corralation between Chestnut Street and Clearbridge Sustainability
Assuming the 90 days horizon Chestnut Street Exchange is expected to generate 0.83 times more return on investment than Clearbridge Sustainability. However, Chestnut Street Exchange is 1.2 times less risky than Clearbridge Sustainability. It trades about 0.11 of its potential returns per unit of risk. Clearbridge Sustainability is currently generating about 0.07 per unit of risk. If you would invest 103,151 in Chestnut Street Exchange on August 27, 2024 and sell it today you would earn a total of 14,348 from holding Chestnut Street Exchange or generate 13.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chestnut Street Exchange vs. Clearbridge Sustainability
Performance |
| Timeline |
| Chestnut Street Exchange |
| Clearbridge Sustainability |
Chestnut Street and Clearbridge Sustainability Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chestnut Street and Clearbridge Sustainability
The main advantage of trading using opposite Chestnut Street and Clearbridge Sustainability positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chestnut Street position performs unexpectedly, Clearbridge Sustainability 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 Sustainability will offset losses from the drop in Clearbridge Sustainability's long position.| Chestnut Street vs. Highland Longshort Healthcare | Chestnut Street vs. Delaware Healthcare Fund | Chestnut Street vs. Allianzgi Health Sciences | Chestnut Street vs. The Gabelli Healthcare |
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 CEOs Directory module to screen CEOs from public companies around the world.
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