Correlation Between Clearbridge International and Franklin International
Can any of the company-specific risk be diversified away by investing in both Clearbridge International and Franklin International 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 International and Franklin International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearbridge International Growth and Franklin International Growth, you can compare the effects of market volatilities on Clearbridge International and Franklin International 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 International with a short position of Franklin International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge International and Franklin International.
Diversification Opportunities for Clearbridge International and Franklin International
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Clearbridge and Franklin is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge International Grow and Franklin International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin International and Clearbridge International 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 International Growth are associated (or correlated) with Franklin International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin International has no effect on the direction of Clearbridge International i.e., Clearbridge International and Franklin International go up and down completely randomly.
Pair Corralation between Clearbridge International and Franklin International
Assuming the 90 days horizon Clearbridge International Growth is expected to generate 0.78 times more return on investment than Franklin International. However, Clearbridge International Growth is 1.29 times less risky than Franklin International. It trades about 0.05 of its potential returns per unit of risk. Franklin International Growth is currently generating about 0.03 per unit of risk. If you would invest 5,019 in Clearbridge International Growth on August 26, 2024 and sell it today you would earn a total of 1,048 from holding Clearbridge International Growth or generate 20.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge International Grow vs. Franklin International Growth
Performance |
| Timeline |
| Clearbridge International |
| Franklin International |
Clearbridge International and Franklin International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge International and Franklin International
The main advantage of trading using opposite Clearbridge International and Franklin International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge International position performs unexpectedly, Franklin International 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 Franklin International will offset losses from the drop in Franklin International's long position.| Clearbridge International vs. The Hartford Small | Clearbridge International vs. Small Pany Growth | Clearbridge International vs. Touchstone Small Cap | Clearbridge International vs. Ab Small Cap |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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