Correlation Between Legg Mason and Cliffwater Corporate
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Cliffwater Corporate 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 Legg Mason and Cliffwater Corporate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legg Mason Partners and Cliffwater Corporate Lending, you can compare the effects of market volatilities on Legg Mason and Cliffwater Corporate 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 Legg Mason with a short position of Cliffwater Corporate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Cliffwater Corporate.
Diversification Opportunities for Legg Mason and Cliffwater Corporate
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Legg and Cliffwater is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Cliffwater Corporate Lending in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cliffwater Corporate and Legg Mason 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 Legg Mason Partners are associated (or correlated) with Cliffwater Corporate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cliffwater Corporate has no effect on the direction of Legg Mason i.e., Legg Mason and Cliffwater Corporate go up and down completely randomly.
Pair Corralation between Legg Mason and Cliffwater Corporate
Assuming the 90 days trading horizon Legg Mason is expected to generate 1.28 times less return on investment than Cliffwater Corporate. In addition to that, Legg Mason is 14.13 times more volatile than Cliffwater Corporate Lending. It trades about 0.04 of its total potential returns per unit of risk. Cliffwater Corporate Lending is currently generating about 0.76 per unit of volatility. If you would invest 967.00 in Cliffwater Corporate Lending on September 12, 2024 and sell it today you would earn a total of 119.00 from holding Cliffwater Corporate Lending or generate 12.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Partners vs. Cliffwater Corporate Lending
Performance |
| Timeline |
| Legg Mason Partners |
| Cliffwater Corporate |
Legg Mason and Cliffwater Corporate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Cliffwater Corporate
The main advantage of trading using opposite Legg Mason and Cliffwater Corporate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Cliffwater Corporate 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 Cliffwater Corporate will offset losses from the drop in Cliffwater Corporate's long position.| Legg Mason vs. Eip Growth And | Legg Mason vs. Ftfa Franklin Templeton Growth | Legg Mason vs. Chase Growth Fund | Legg Mason vs. Pace Smallmedium Growth |
| Cliffwater Corporate vs. Rbc Emerging Markets | Cliffwater Corporate vs. Ashmore Emerging Markets | Cliffwater Corporate vs. Ep Emerging Markets | Cliffwater Corporate vs. Barings Emerging Markets |
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.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |