Correlation Between Oil Gas and Clearbridge Select
Can any of the company-specific risk be diversified away by investing in both Oil Gas 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 Oil Gas and Clearbridge Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oil Gas Ultrasector and Clearbridge Select Fund, you can compare the effects of market volatilities on Oil Gas 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 Oil Gas with a short position of Clearbridge Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Gas and Clearbridge Select.
Diversification Opportunities for Oil Gas and Clearbridge Select
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oil and Clearbridge is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Oil Gas Ultrasector and Clearbridge Select Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Select and Oil Gas 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 Oil Gas Ultrasector 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 Oil Gas i.e., Oil Gas and Clearbridge Select go up and down completely randomly.
Pair Corralation between Oil Gas and Clearbridge Select
Assuming the 90 days horizon Oil Gas is expected to generate 1.6 times less return on investment than Clearbridge Select. In addition to that, Oil Gas is 1.95 times more volatile than Clearbridge Select Fund. It trades about 0.09 of its total potential returns per unit of risk. Clearbridge Select Fund is currently generating about 0.29 per unit of volatility. If you would invest 4,797 in Clearbridge Select Fund on September 3, 2024 and sell it today you would earn a total of 858.00 from holding Clearbridge Select Fund or generate 17.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oil Gas Ultrasector vs. Clearbridge Select Fund
Performance |
| Timeline |
| Oil Gas Ultrasector |
| Clearbridge Select |
Oil Gas and Clearbridge Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oil Gas and Clearbridge Select
The main advantage of trading using opposite Oil Gas and Clearbridge Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil Gas 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.| Oil Gas vs. Oil Gas Ultrasector | Oil Gas vs. Ultramid Cap Profund Ultramid Cap | Oil Gas vs. Precious Metals Ultrasector | Oil Gas vs. Real Estate Ultrasector |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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