Correlation Between Clearbridge International and Clearbridge Value
Can any of the company-specific risk be diversified away by investing in both Clearbridge International and Clearbridge Value 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 Clearbridge Value 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 Clearbridge Value Trust, you can compare the effects of market volatilities on Clearbridge International and Clearbridge Value 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 Clearbridge Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge International and Clearbridge Value.
Diversification Opportunities for Clearbridge International and Clearbridge Value
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clearbridge and Clearbridge is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge International Grow and Clearbridge Value Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Value Trust 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 Clearbridge Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Value Trust has no effect on the direction of Clearbridge International i.e., Clearbridge International and Clearbridge Value go up and down completely randomly.
Pair Corralation between Clearbridge International and Clearbridge Value
Assuming the 90 days horizon Clearbridge International Growth is expected to under-perform the Clearbridge Value. But the mutual fund apears to be less risky and, when comparing its historical volatility, Clearbridge International Growth is 1.43 times less risky than Clearbridge Value. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Clearbridge Value Trust is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 10,657 in Clearbridge Value Trust on August 28, 2024 and sell it today you would earn a total of 479.00 from holding Clearbridge Value Trust or generate 4.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge International Grow vs. Clearbridge Value Trust
Performance |
| Timeline |
| Clearbridge International |
| Clearbridge Value Trust |
Clearbridge International and Clearbridge Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge International and Clearbridge Value
The main advantage of trading using opposite Clearbridge International and Clearbridge Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge International position performs unexpectedly, Clearbridge Value 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 Value will offset losses from the drop in Clearbridge Value's long position.The idea behind Clearbridge International Growth and Clearbridge Value Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Clearbridge Value vs. Franklin Growth Fund | Clearbridge Value vs. Franklin Total Return | Clearbridge Value vs. Franklin Rising Dividends | Clearbridge Value vs. Franklin Strategic Income |
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 Stocks Directory module to find actively traded stocks across global markets.
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