Correlation Between Clearbridge Variable and Clearbridge Select
Can any of the company-specific risk be diversified away by investing in both Clearbridge Variable and Clearbridge Select 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 Clearbridge Variable and Clearbridge Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearbridge Variable Appreciation and Clearbridge Select Fund, you can compare the effects of market volatilities on Clearbridge Variable and Clearbridge Select 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 Clearbridge Variable with a short position of Clearbridge Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Variable and Clearbridge Select.
Diversification Opportunities for Clearbridge Variable and Clearbridge Select
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Clearbridge and Clearbridge is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Variable Appreciat and Clearbridge Select Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Select and Clearbridge Variable 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 Clearbridge Variable Appreciation are associated (or correlated) with Clearbridge Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Select has no effect on the direction of Clearbridge Variable i.e., Clearbridge Variable and Clearbridge Select go up and down completely randomly.
Pair Corralation between Clearbridge Variable and Clearbridge Select
Assuming the 90 days horizon Clearbridge Variable is expected to generate 1.43 times less return on investment than Clearbridge Select. But when comparing it to its historical volatility, Clearbridge Variable Appreciation is 1.27 times less risky than Clearbridge Select. It trades about 0.04 of its potential returns per unit of risk. Clearbridge Select Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,464 in Clearbridge Select Fund on October 22, 2024 and sell it today you would earn a total of 36.00 from holding Clearbridge Select Fund or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Variable Appreciat vs. Clearbridge Select Fund
Performance |
| Timeline |
| Clearbridge Variable |
| Clearbridge Select |
Clearbridge Variable and Clearbridge Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Variable and Clearbridge Select
The main advantage of trading using opposite Clearbridge Variable and Clearbridge Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Variable position performs unexpectedly, Clearbridge Select 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 Select will offset losses from the drop in Clearbridge Select's long position.| Clearbridge Variable vs. Morningstar Global Income | Clearbridge Variable vs. Growth Fund Of | Clearbridge Variable vs. Qs Large Cap | Clearbridge Variable vs. Alliancebernstein Global Highome |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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