Correlation Between Clearbridge Small and Western Asset
Can any of the company-specific risk be diversified away by investing in both Clearbridge Small and Western Asset 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 Small and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearbridge Small Cap and Western Asset Mortgage, you can compare the effects of market volatilities on Clearbridge Small and Western Asset 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 Small with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Small and Western Asset.
Diversification Opportunities for Clearbridge Small and Western Asset
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Clearbridge and Western is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Small Cap and Western Asset Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Mortgage and Clearbridge Small 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 Small Cap are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Mortgage has no effect on the direction of Clearbridge Small i.e., Clearbridge Small and Western Asset go up and down completely randomly.
Pair Corralation between Clearbridge Small and Western Asset
Assuming the 90 days horizon Clearbridge Small Cap is expected to generate 2.38 times more return on investment than Western Asset. However, Clearbridge Small is 2.38 times more volatile than Western Asset Mortgage. It trades about 0.05 of its potential returns per unit of risk. Western Asset Mortgage is currently generating about 0.03 per unit of risk. If you would invest 5,567 in Clearbridge Small Cap on September 3, 2024 and sell it today you would earn a total of 1,702 from holding Clearbridge Small Cap or generate 30.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Small Cap vs. Western Asset Mortgage
Performance |
| Timeline |
| Clearbridge Small Cap |
| Western Asset Mortgage |
Clearbridge Small and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Small and Western Asset
The main advantage of trading using opposite Clearbridge Small and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Small position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Clearbridge Small vs. Dws Government Money | Clearbridge Small vs. Prudential Government Money | Clearbridge Small vs. Matson Money Equity | Clearbridge Small vs. Rbc Funds Trust |
| Western Asset vs. Small Cap Equity | Western Asset vs. Rbc Global Equity | Western Asset vs. Us Strategic Equity | Western Asset vs. Balanced Fund Retail |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |