Correlation Between ClearBridge Large and ClearBridge Dividend
Can any of the company-specific risk be diversified away by investing in both ClearBridge Large and ClearBridge Dividend 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 ClearBridge Dividend 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 ClearBridge Dividend Strategy, you can compare the effects of market volatilities on ClearBridge Large and ClearBridge Dividend 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 ClearBridge Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of ClearBridge Large and ClearBridge Dividend.
Diversification Opportunities for ClearBridge Large and ClearBridge Dividend
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ClearBridge and ClearBridge is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding ClearBridge Large Cap and ClearBridge Dividend Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearBridge Dividend 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 ClearBridge Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearBridge Dividend has no effect on the direction of ClearBridge Large i.e., ClearBridge Large and ClearBridge Dividend go up and down completely randomly.
Pair Corralation between ClearBridge Large and ClearBridge Dividend
Given the investment horizon of 90 days ClearBridge Large Cap is expected to generate 1.45 times more return on investment than ClearBridge Dividend. However, ClearBridge Large is 1.45 times more volatile than ClearBridge Dividend Strategy. It trades about 0.13 of its potential returns per unit of risk. ClearBridge Dividend Strategy is currently generating about 0.1 per unit of risk. If you would invest 4,438 in ClearBridge Large Cap on November 19, 2024 and sell it today you would earn a total of 3,413 from holding ClearBridge Large Cap or generate 76.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ClearBridge Large Cap vs. ClearBridge Dividend Strategy
Performance |
| Timeline |
| ClearBridge Large Cap |
| ClearBridge Dividend |
ClearBridge Large and ClearBridge Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ClearBridge Large and ClearBridge Dividend
The main advantage of trading using opposite ClearBridge Large and ClearBridge Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ClearBridge Large position performs unexpectedly, ClearBridge Dividend 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 Dividend will offset losses from the drop in ClearBridge Dividend'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 |
| ClearBridge Dividend vs. ClearBridge Large Cap | ClearBridge Dividend vs. VictoryShares Dividend Accelerator | ClearBridge Dividend vs. VictoryShares Multi Factor Minimum |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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