Correlation Between Clearbridge Aggressive and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Clearbridge Aggressive and Dow Jones 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 Aggressive and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearbridge Aggressive Growth and Dow Jones Industrial, you can compare the effects of market volatilities on Clearbridge Aggressive and Dow Jones 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 Aggressive with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Aggressive and Dow Jones.
Diversification Opportunities for Clearbridge Aggressive and Dow Jones
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Clearbridge and Dow is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Aggressive Growth and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Clearbridge Aggressive 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 Aggressive Growth are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Clearbridge Aggressive i.e., Clearbridge Aggressive and Dow Jones go up and down completely randomly.
Pair Corralation between Clearbridge Aggressive and Dow Jones
Assuming the 90 days horizon Clearbridge Aggressive Growth is expected to under-perform the Dow Jones. In addition to that, Clearbridge Aggressive is 1.73 times more volatile than Dow Jones Industrial. It trades about -0.15 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.16 per unit of volatility. If you would invest 4,488,213 in Dow Jones Industrial on December 1, 2024 and sell it today you would lose (104,122) from holding Dow Jones Industrial or give up 2.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Clearbridge Aggressive Growth vs. Dow Jones Industrial
Performance |
| Timeline |
Clearbridge Aggressive and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Clearbridge Aggressive Growth
Pair trading matchups for Clearbridge Aggressive
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Clearbridge Aggressive and Dow Jones
The main advantage of trading using opposite Clearbridge Aggressive and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Aggressive position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Clearbridge Aggressive vs. Short Real Estate | Clearbridge Aggressive vs. Nomura Real Estate | Clearbridge Aggressive vs. Vy Clarion Real | Clearbridge Aggressive vs. Voya Real Estate |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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