Correlation Between Clearbridge Value and Vanguard Value
Can any of the company-specific risk be diversified away by investing in both Clearbridge Value and Vanguard 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 Value and Vanguard Value 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 Vanguard Value Index, you can compare the effects of market volatilities on Clearbridge Value and Vanguard 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 Value with a short position of Vanguard Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Value and Vanguard Value.
Diversification Opportunities for Clearbridge Value and Vanguard Value
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Clearbridge and Vanguard is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Value Trust and Vanguard Value Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Value Index 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 Vanguard Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Value Index has no effect on the direction of Clearbridge Value i.e., Clearbridge Value and Vanguard Value go up and down completely randomly.
Pair Corralation between Clearbridge Value and Vanguard Value
Assuming the 90 days horizon Clearbridge Value Trust is expected to generate 1.22 times more return on investment than Vanguard Value. However, Clearbridge Value is 1.22 times more volatile than Vanguard Value Index. It trades about 0.07 of its potential returns per unit of risk. Vanguard Value Index is currently generating about -0.02 per unit of risk. If you would invest 13,775 in Clearbridge Value Trust on September 13, 2024 and sell it today you would earn a total of 301.00 from holding Clearbridge Value Trust or generate 2.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Value Trust vs. Vanguard Value Index
Performance |
| Timeline |
| Clearbridge Value Trust |
| Vanguard Value Index |
Clearbridge Value and Vanguard Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Value and Vanguard Value
The main advantage of trading using opposite Clearbridge Value and Vanguard Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Value position performs unexpectedly, Vanguard 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 Vanguard Value will offset losses from the drop in Vanguard Value's long position.| Clearbridge Value vs. Franklin Growth Fund | Clearbridge Value vs. Franklin Total Return | Clearbridge Value vs. Franklin Rising Dividends | Clearbridge Value vs. Franklin Mutual Shares |
| Vanguard Value vs. Vanguard Small Cap Value | Vanguard Value vs. Vanguard Growth Index | Vanguard Value vs. Vanguard Mid Cap Value | Vanguard Value vs. Vanguard Small Cap Index |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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