Correlation Between Highland Long/short and Clearbridge Large
Can any of the company-specific risk be diversified away by investing in both Highland Long/short and Clearbridge Large 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 Highland Long/short and Clearbridge Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highland Longshort Healthcare and Clearbridge Large Cap, you can compare the effects of market volatilities on Highland Long/short and Clearbridge Large 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 Highland Long/short with a short position of Clearbridge Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Long/short and Clearbridge Large.
Diversification Opportunities for Highland Long/short and Clearbridge Large
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Highland and Clearbridge is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Highland Longshort Healthcare and Clearbridge Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Large Cap and Highland Long/short 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 Highland Longshort Healthcare are associated (or correlated) with Clearbridge Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Large Cap has no effect on the direction of Highland Long/short i.e., Highland Long/short and Clearbridge Large go up and down completely randomly.
Pair Corralation between Highland Long/short and Clearbridge Large
Assuming the 90 days horizon Highland Long/short is expected to generate 1.25 times less return on investment than Clearbridge Large. But when comparing it to its historical volatility, Highland Longshort Healthcare is 3.87 times less risky than Clearbridge Large. It trades about 0.13 of its potential returns per unit of risk. Clearbridge Large Cap is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,494 in Clearbridge Large Cap on November 28, 2024 and sell it today you would earn a total of 542.00 from holding Clearbridge Large Cap or generate 15.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highland Longshort Healthcare vs. Clearbridge Large Cap
Performance |
| Timeline |
| Highland Long/short |
| Clearbridge Large Cap |
Highland Long/short and Clearbridge Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Long/short and Clearbridge Large
The main advantage of trading using opposite Highland Long/short and Clearbridge Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Long/short position performs unexpectedly, Clearbridge Large 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 Large will offset losses from the drop in Clearbridge Large's long position.| Highland Long/short vs. Payden High Income | Highland Long/short vs. Prudential High Yield | Highland Long/short vs. Mainstay High Yield | Highland Long/short vs. Gmo High Yield |
| Clearbridge Large vs. Western Asset Premier | Clearbridge Large vs. Fidelity Series Government | Clearbridge Large vs. Us Government Securities | Clearbridge Large vs. Aig Government Money |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |