Correlation Between Clearbridge Small and Clearbridge Large
Can any of the company-specific risk be diversified away by investing in both Clearbridge Small 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 Clearbridge Small and Clearbridge Large 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 Clearbridge Large Cap, you can compare the effects of market volatilities on Clearbridge Small 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 Clearbridge Small with a short position of Clearbridge Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Small and Clearbridge Large.
Diversification Opportunities for Clearbridge Small and Clearbridge Large
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Clearbridge and Clearbridge is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Small Cap 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 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 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 Clearbridge Small i.e., Clearbridge Small and Clearbridge Large go up and down completely randomly.
Pair Corralation between Clearbridge Small and Clearbridge Large
Assuming the 90 days horizon Clearbridge Small Cap is expected to generate 1.73 times more return on investment than Clearbridge Large. However, Clearbridge Small is 1.73 times more volatile than Clearbridge Large Cap. It trades about 0.1 of its potential returns per unit of risk. Clearbridge Large Cap is currently generating about 0.11 per unit of risk. If you would invest 6,168 in Clearbridge Small Cap on August 25, 2024 and sell it today you would earn a total of 995.00 from holding Clearbridge Small Cap or generate 16.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Small Cap vs. Clearbridge Large Cap
Performance |
| Timeline |
| Clearbridge Small Cap |
| Clearbridge Large Cap |
Clearbridge Small and Clearbridge Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Small and Clearbridge Large
The main advantage of trading using opposite Clearbridge Small and Clearbridge Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Small 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.| Clearbridge Small vs. Us Government Securities | Clearbridge Small vs. Dreyfus Government Cash | Clearbridge Small vs. Invesco Government Fund | Clearbridge Small vs. Dunham Porategovernment Bond |
| Clearbridge Large vs. Extended Market Index | Clearbridge Large vs. Origin Emerging Markets | Clearbridge Large vs. Shelton Emerging Markets | Clearbridge Large vs. Doubleline Emerging Markets |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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