Correlation Between Muhlenkamp Fund and Clearbridge Mid
Can any of the company-specific risk be diversified away by investing in both Muhlenkamp Fund and Clearbridge Mid 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 Muhlenkamp Fund and Clearbridge Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Muhlenkamp Fund Institutional and Clearbridge Mid Cap, you can compare the effects of market volatilities on Muhlenkamp Fund and Clearbridge Mid 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 Muhlenkamp Fund with a short position of Clearbridge Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muhlenkamp Fund and Clearbridge Mid.
Diversification Opportunities for Muhlenkamp Fund and Clearbridge Mid
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Muhlenkamp and Clearbridge is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Muhlenkamp Fund Institutional and Clearbridge Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Mid Cap and Muhlenkamp 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 Muhlenkamp Fund Institutional are associated (or correlated) with Clearbridge Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Mid Cap has no effect on the direction of Muhlenkamp Fund i.e., Muhlenkamp Fund and Clearbridge Mid go up and down completely randomly.
Pair Corralation between Muhlenkamp Fund and Clearbridge Mid
Assuming the 90 days horizon Muhlenkamp Fund is expected to generate 2.25 times less return on investment than Clearbridge Mid. But when comparing it to its historical volatility, Muhlenkamp Fund Institutional is 1.21 times less risky than Clearbridge Mid. It trades about 0.18 of its potential returns per unit of risk. Clearbridge Mid Cap is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 3,885 in Clearbridge Mid Cap on August 28, 2024 and sell it today you would earn a total of 326.00 from holding Clearbridge Mid Cap or generate 8.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Muhlenkamp Fund Institutional vs. Clearbridge Mid Cap
Performance |
| Timeline |
| Muhlenkamp Fund Inst |
| Clearbridge Mid Cap |
Muhlenkamp Fund and Clearbridge Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Muhlenkamp Fund and Clearbridge Mid
The main advantage of trading using opposite Muhlenkamp Fund and Clearbridge Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muhlenkamp Fund position performs unexpectedly, Clearbridge Mid 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 Mid will offset losses from the drop in Clearbridge Mid's long position.| Muhlenkamp Fund vs. Third Avenue Value | Muhlenkamp Fund vs. Meridian Growth Fund | Muhlenkamp Fund vs. Heartland Value Fund | Muhlenkamp Fund vs. Mairs Power Growth |
| Clearbridge Mid vs. Clearbridge Aggressive Growth | Clearbridge Mid vs. Clearbridge Small Cap | Clearbridge Mid vs. Qs International Equity | Clearbridge Mid vs. Clearbridge Appreciation Fund |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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