Correlation Between Live Oak and Clearbridge Large
Can any of the company-specific risk be diversified away by investing in both Live Oak and Clearbridge Large 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 Live Oak and Clearbridge Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Oak Health and Clearbridge Large Cap, you can compare the effects of market volatilities on Live Oak and Clearbridge Large 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 Live Oak with a short position of Clearbridge Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Clearbridge Large.
Diversification Opportunities for Live Oak and Clearbridge Large
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Live and Clearbridge is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Clearbridge Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Large Cap and Live Oak 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 Live Oak Health are associated (or correlated) with Clearbridge Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Large Cap has no effect on the direction of Live Oak i.e., Live Oak and Clearbridge Large go up and down completely randomly.
Pair Corralation between Live Oak and Clearbridge Large
Assuming the 90 days horizon Live Oak Health is expected to generate 0.61 times more return on investment than Clearbridge Large. However, Live Oak Health is 1.64 times less risky than Clearbridge Large. It trades about -0.24 of its potential returns per unit of risk. Clearbridge Large Cap is currently generating about -0.21 per unit of risk. If you would invest 2,157 in Live Oak Health on October 11, 2024 and sell it today you would lose (95.00) from holding Live Oak Health or give up 4.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Oak Health vs. Clearbridge Large Cap
Performance |
| Timeline |
| Live Oak Health |
| Clearbridge Large Cap |
Live Oak and Clearbridge Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Clearbridge Large
The main advantage of trading using opposite Live Oak and Clearbridge Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak position performs unexpectedly, Clearbridge Large 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 Large will offset losses from the drop in Clearbridge Large's long position.| Live Oak vs. Black Oak Emerging | Live Oak vs. Pin Oak Equity | Live Oak vs. Red Oak Technology | Live Oak vs. White Oak Select |
| Clearbridge Large vs. Lord Abbett Health | Clearbridge Large vs. Deutsche Health And | Clearbridge Large vs. Baron Health Care | Clearbridge Large vs. Live Oak Health |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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