Correlation Between Clearbridge Value and Western Asset
Can any of the company-specific risk be diversified away by investing in both Clearbridge Value 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 Value 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 Value Trust and Western Asset Intermediate Term, you can compare the effects of market volatilities on Clearbridge Value 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 Value with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Value and Western Asset.
Diversification Opportunities for Clearbridge Value and Western Asset
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clearbridge and Western is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Value Trust and Western Asset Intermediate Ter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Interm and Clearbridge Value 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 Value Trust 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 Interm has no effect on the direction of Clearbridge Value i.e., Clearbridge Value and Western Asset go up and down completely randomly.
Pair Corralation between Clearbridge Value and Western Asset
Assuming the 90 days horizon Clearbridge Value Trust is expected to generate 3.1 times more return on investment than Western Asset. However, Clearbridge Value is 3.1 times more volatile than Western Asset Intermediate Term. It trades about 0.32 of its potential returns per unit of risk. Western Asset Intermediate Term is currently generating about 0.18 per unit of risk. If you would invest 10,504 in Clearbridge Value Trust on September 1, 2024 and sell it today you would earn a total of 699.00 from holding Clearbridge Value Trust or generate 6.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Value Trust vs. Western Asset Intermediate Ter
Performance |
| Timeline |
| Clearbridge Value Trust |
| Western Asset Interm |
Clearbridge Value and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Value and Western Asset
The main advantage of trading using opposite Clearbridge Value and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Value 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 Value vs. Volumetric Fund Volumetric | Clearbridge Value vs. Vanguard Small Cap Growth | Clearbridge Value vs. Semiconductor Ultrasector Profund | Clearbridge Value vs. T Rowe Price |
| Western Asset vs. Franklin Mutual Beacon | Western Asset vs. Templeton Developing Markets | Western Asset vs. Franklin Mutual Global | Western Asset vs. Franklin Mutual Global |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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