Correlation Between Clearbridge Energy and First Trust
Can any of the company-specific risk be diversified away by investing in both Clearbridge Energy and First Trust 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 Energy and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearbridge Energy Mlp and First Trust Mlp, you can compare the effects of market volatilities on Clearbridge Energy and First Trust 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 Energy with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Energy and First Trust.
Diversification Opportunities for Clearbridge Energy and First Trust
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Clearbridge and First is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Energy Mlp and First Trust Mlp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Mlp and Clearbridge Energy 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 Energy Mlp are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Mlp has no effect on the direction of Clearbridge Energy i.e., Clearbridge Energy and First Trust go up and down completely randomly.
Pair Corralation between Clearbridge Energy and First Trust
If you would invest 4,313 in Clearbridge Energy Mlp on August 28, 2024 and sell it today you would earn a total of 568.00 from holding Clearbridge Energy Mlp or generate 13.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Clearbridge Energy Mlp vs. First Trust Mlp
Performance |
| Timeline |
| Clearbridge Energy Mlp |
| First Trust Mlp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Clearbridge Energy and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Energy and First Trust
The main advantage of trading using opposite Clearbridge Energy and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Energy position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Clearbridge Energy vs. BlackRock Capital Allocation | Clearbridge Energy vs. GCM Grosvenor | Clearbridge Energy vs. MFS High Yield | Clearbridge Energy vs. First Trust High |
| First Trust vs. Franklin Templeton Limited | First Trust vs. Blackrock Floating Rate | First Trust vs. Cohen Steers Limited | First Trust vs. Eagle Point Income |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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