Correlation Between Western Asset and Clearbridge Aggressive
Can any of the company-specific risk be diversified away by investing in both Western Asset and Clearbridge Aggressive 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 Western Asset and Clearbridge Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Mortgage and Clearbridge Aggressive Growth, you can compare the effects of market volatilities on Western Asset and Clearbridge Aggressive 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 Western Asset with a short position of Clearbridge Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Clearbridge Aggressive.
Diversification Opportunities for Western Asset and Clearbridge Aggressive
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and Clearbridge is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Mortgage and Clearbridge Aggressive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Aggressive and Western Asset 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 Western Asset Mortgage are associated (or correlated) with Clearbridge Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Aggressive has no effect on the direction of Western Asset i.e., Western Asset and Clearbridge Aggressive go up and down completely randomly.
Pair Corralation between Western Asset and Clearbridge Aggressive
Assuming the 90 days horizon Western Asset is expected to generate 3.32 times less return on investment than Clearbridge Aggressive. But when comparing it to its historical volatility, Western Asset Mortgage is 2.64 times less risky than Clearbridge Aggressive. It trades about 0.06 of its potential returns per unit of risk. Clearbridge Aggressive Growth is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 10,768 in Clearbridge Aggressive Growth on September 1, 2024 and sell it today you would earn a total of 1,588 from holding Clearbridge Aggressive Growth or generate 14.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Mortgage vs. Clearbridge Aggressive Growth
Performance |
| Timeline |
| Western Asset Mortgage |
| Clearbridge Aggressive |
Western Asset and Clearbridge Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Clearbridge Aggressive
The main advantage of trading using opposite Western Asset and Clearbridge Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Clearbridge Aggressive 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 Aggressive will offset losses from the drop in Clearbridge Aggressive's long position.| Western Asset vs. Clearbridge Aggressive Growth | Western Asset vs. Clearbridge Small Cap | Western Asset vs. Qs International Equity | Western Asset vs. Clearbridge Appreciation Fund |
| Clearbridge Aggressive vs. Ab Value Fund | Clearbridge Aggressive vs. Fa 529 Aggressive | Clearbridge Aggressive vs. Leggmason Partners Institutional | Clearbridge Aggressive vs. Arrow Managed Futures |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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