Correlation Between Clearbridge Select and Barings Global
Can any of the company-specific risk be diversified away by investing in both Clearbridge Select and Barings Global 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 Select and Barings Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearbridge Select and Barings Global Floating, you can compare the effects of market volatilities on Clearbridge Select and Barings Global 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 Select with a short position of Barings Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Select and Barings Global.
Diversification Opportunities for Clearbridge Select and Barings Global
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ClearBridge and Barings is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Select and Barings Global Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Global Floating and Clearbridge Select 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 Select are associated (or correlated) with Barings Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Global Floating has no effect on the direction of Clearbridge Select i.e., Clearbridge Select and Barings Global go up and down completely randomly.
Pair Corralation between Clearbridge Select and Barings Global
Assuming the 90 days horizon Clearbridge Select is expected to generate 5.51 times more return on investment than Barings Global. However, Clearbridge Select is 5.51 times more volatile than Barings Global Floating. It trades about 0.09 of its potential returns per unit of risk. Barings Global Floating is currently generating about 0.22 per unit of risk. If you would invest 3,728 in Clearbridge Select on September 3, 2024 and sell it today you would earn a total of 1,933 from holding Clearbridge Select or generate 51.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Select vs. Barings Global Floating
Performance |
| Timeline |
| Clearbridge Select |
| Barings Global Floating |
Clearbridge Select and Barings Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Select and Barings Global
The main advantage of trading using opposite Clearbridge Select and Barings Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Select position performs unexpectedly, Barings Global 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 Barings Global will offset losses from the drop in Barings Global's long position.| Clearbridge Select vs. Invesco Energy Fund | Clearbridge Select vs. Firsthand Alternative Energy | Clearbridge Select vs. Oil Gas Ultrasector | Clearbridge Select vs. Franklin Natural Resources |
| Barings Global vs. Oppenheimer Senior Floating | Barings Global vs. Oppenheimer Senior Floating | Barings Global vs. Floating Rate Fund | Barings Global vs. Floating Rate Fund |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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