Correlation Between ClearBridge Large and AOT Growth
Can any of the company-specific risk be diversified away by investing in both ClearBridge Large and AOT Growth 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 AOT Growth 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 AOT Growth and, you can compare the effects of market volatilities on ClearBridge Large and AOT Growth 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 AOT Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of ClearBridge Large and AOT Growth.
Diversification Opportunities for ClearBridge Large and AOT Growth
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ClearBridge and AOT is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding ClearBridge Large Cap and AOT Growth and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOT Growth 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 AOT Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AOT Growth has no effect on the direction of ClearBridge Large i.e., ClearBridge Large and AOT Growth go up and down completely randomly.
Pair Corralation between ClearBridge Large and AOT Growth
Given the investment horizon of 90 days ClearBridge Large is expected to generate 1.48 times less return on investment than AOT Growth. But when comparing it to its historical volatility, ClearBridge Large Cap is 1.51 times less risky than AOT Growth. It trades about 0.08 of its potential returns per unit of risk. AOT Growth and is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,617 in AOT Growth and on November 3, 2024 and sell it today you would earn a total of 1,077 from holding AOT Growth and or generate 29.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ClearBridge Large Cap vs. AOT Growth and
Performance |
| Timeline |
| ClearBridge Large Cap |
| AOT Growth |
ClearBridge Large and AOT Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ClearBridge Large and AOT Growth
The main advantage of trading using opposite ClearBridge Large and AOT Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ClearBridge Large position performs unexpectedly, AOT Growth 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 AOT Growth will offset losses from the drop in AOT Growth's long position.| ClearBridge Large vs. ClearBridge Dividend Strategy | ClearBridge Large vs. Janus Henderson Small | ClearBridge Large vs. Janus Henderson SmallMid | ClearBridge Large vs. Principal Quality ETF |
| AOT Growth vs. Global X NASDAQ | AOT Growth vs. Invesco ESG NASDAQ | AOT Growth vs. ClearBridge Large Cap | AOT Growth vs. AdvisorShares Dorsey Wright |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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