Correlation Between Scharf Fund and Clearbridge Small
Can any of the company-specific risk be diversified away by investing in both Scharf Fund and Clearbridge Small 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 Scharf Fund and Clearbridge Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Fund Retail and Clearbridge Small Cap, you can compare the effects of market volatilities on Scharf Fund and Clearbridge Small 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 Scharf Fund with a short position of Clearbridge Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Fund and Clearbridge Small.
Diversification Opportunities for Scharf Fund and Clearbridge Small
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Scharf and Clearbridge is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Fund Retail and Clearbridge Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Small Cap and Scharf Fund 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 Scharf Fund Retail are associated (or correlated) with Clearbridge Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Small Cap has no effect on the direction of Scharf Fund i.e., Scharf Fund and Clearbridge Small go up and down completely randomly.
Pair Corralation between Scharf Fund and Clearbridge Small
Assuming the 90 days horizon Scharf Fund Retail is expected to under-perform the Clearbridge Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Scharf Fund Retail is 1.74 times less risky than Clearbridge Small. The mutual fund trades about -0.18 of its potential returns per unit of risk. The Clearbridge Small Cap is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 7,159 in Clearbridge Small Cap on September 12, 2024 and sell it today you would lose (48.00) from holding Clearbridge Small Cap or give up 0.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Fund Retail vs. Clearbridge Small Cap
Performance |
| Timeline |
| Scharf Fund Retail |
| Clearbridge Small Cap |
Scharf Fund and Clearbridge Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Fund and Clearbridge Small
The main advantage of trading using opposite Scharf Fund and Clearbridge Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Fund position performs unexpectedly, Clearbridge Small 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 Small will offset losses from the drop in Clearbridge Small's long position.| Scharf Fund vs. Gmo Resources | Scharf Fund vs. Icon Natural Resources | Scharf Fund vs. Fidelity Advisor Energy | Scharf Fund vs. Oil Gas Ultrasector |
| Clearbridge Small vs. Sp Midcap Index | Clearbridge Small vs. Sp 500 Index | Clearbridge Small vs. Nasdaq 100 Index Fund | Clearbridge Small vs. Deutsche Sp 500 |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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