Correlation Between Clearbridge Large and Western Asset
Can any of the company-specific risk be diversified away by investing in both Clearbridge Large 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 Large 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 Large Cap and Western Asset Inflation, you can compare the effects of market volatilities on Clearbridge Large 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 Large with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Large and Western Asset.
Diversification Opportunities for Clearbridge Large and Western Asset
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Clearbridge and Western is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Large Cap and Western Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Inflation and Clearbridge Large 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 Large Cap 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 Inflation has no effect on the direction of Clearbridge Large i.e., Clearbridge Large and Western Asset go up and down completely randomly.
Pair Corralation between Clearbridge Large and Western Asset
Assuming the 90 days horizon Clearbridge Large Cap is expected to generate 3.29 times more return on investment than Western Asset. However, Clearbridge Large is 3.29 times more volatile than Western Asset Inflation. It trades about 0.21 of its potential returns per unit of risk. Western Asset Inflation is currently generating about -0.12 per unit of risk. If you would invest 4,430 in Clearbridge Large Cap on August 24, 2024 and sell it today you would earn a total of 200.00 from holding Clearbridge Large Cap or generate 4.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Large Cap vs. Western Asset Inflation
Performance |
| Timeline |
| Clearbridge Large Cap |
| Western Asset Inflation |
Clearbridge Large and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Large and Western Asset
The main advantage of trading using opposite Clearbridge Large and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Large 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 Large vs. Dws Government Money | Clearbridge Large vs. Nuveen All American Municipal | Clearbridge Large vs. T Rowe Price | Clearbridge Large vs. Baird Strategic Municipal |
| Western Asset vs. Vanguard Inflation Protected Securities | Western Asset vs. Vanguard Inflation Protected Securities | Western Asset vs. American Funds Inflation | Western Asset vs. American Funds Inflation |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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