Correlation Between Balanced Fund and Clearbridge Value
Can any of the company-specific risk be diversified away by investing in both Balanced Fund and Clearbridge Value 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 Balanced Fund and Clearbridge Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Fund Retail and Clearbridge Value Trust, you can compare the effects of market volatilities on Balanced Fund and Clearbridge Value 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 Balanced Fund with a short position of Clearbridge Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and Clearbridge Value.
Diversification Opportunities for Balanced Fund and Clearbridge Value
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Balanced and Clearbridge is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Retail and Clearbridge Value Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Value Trust and Balanced 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 Balanced Fund Retail are associated (or correlated) with Clearbridge Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Value Trust has no effect on the direction of Balanced Fund i.e., Balanced Fund and Clearbridge Value go up and down completely randomly.
Pair Corralation between Balanced Fund and Clearbridge Value
Assuming the 90 days horizon Balanced Fund is expected to generate 1.23 times less return on investment than Clearbridge Value. But when comparing it to its historical volatility, Balanced Fund Retail is 1.71 times less risky than Clearbridge Value. It trades about 0.1 of its potential returns per unit of risk. Clearbridge Value Trust is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 10,603 in Clearbridge Value Trust on September 5, 2024 and sell it today you would earn a total of 3,718 from holding Clearbridge Value Trust or generate 35.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Balanced Fund Retail vs. Clearbridge Value Trust
Performance |
| Timeline |
| Balanced Fund Retail |
| Clearbridge Value Trust |
Balanced Fund and Clearbridge Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Fund and Clearbridge Value
The main advantage of trading using opposite Balanced Fund and Clearbridge Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Fund position performs unexpectedly, Clearbridge Value 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 Value will offset losses from the drop in Clearbridge Value's long position.| Balanced Fund vs. Muirfield Fund Retail | Balanced Fund vs. Dynamic Growth Fund | Balanced Fund vs. Infrastructure Fund Retail | Balanced Fund vs. Quantex Fund Retail |
| Clearbridge Value vs. Global Gold Fund | Clearbridge Value vs. First Eagle Gold | Clearbridge Value vs. Goldman Sachs Clean | Clearbridge Value vs. Gamco Global Gold |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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