Correlation Between Growth Fund and Clearbridge Variable
Can any of the company-specific risk be diversified away by investing in both Growth Fund and Clearbridge Variable 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 Growth Fund and Clearbridge Variable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and Clearbridge Variable Appreciation, you can compare the effects of market volatilities on Growth Fund and Clearbridge Variable 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 Growth Fund with a short position of Clearbridge Variable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Clearbridge Variable.
Diversification Opportunities for Growth Fund and Clearbridge Variable
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Growth and Clearbridge is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Clearbridge Variable Appreciat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Variable and Growth 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 Growth Fund Of are associated (or correlated) with Clearbridge Variable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Variable has no effect on the direction of Growth Fund i.e., Growth Fund and Clearbridge Variable go up and down completely randomly.
Pair Corralation between Growth Fund and Clearbridge Variable
Assuming the 90 days horizon Growth Fund Of is expected to generate 1.34 times more return on investment than Clearbridge Variable. However, Growth Fund is 1.34 times more volatile than Clearbridge Variable Appreciation. It trades about 0.07 of its potential returns per unit of risk. Clearbridge Variable Appreciation is currently generating about 0.04 per unit of risk. If you would invest 6,091 in Growth Fund Of on November 3, 2024 and sell it today you would earn a total of 774.00 from holding Growth Fund Of or generate 12.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Fund Of vs. Clearbridge Variable Appreciat
Performance |
| Timeline |
| Growth Fund |
| Clearbridge Variable |
Growth Fund and Clearbridge Variable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Clearbridge Variable
The main advantage of trading using opposite Growth Fund and Clearbridge Variable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Clearbridge Variable 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 Variable will offset losses from the drop in Clearbridge Variable's long position.| Growth Fund vs. Europacific Growth Fund | Growth Fund vs. Capital World Growth | Growth Fund vs. Growth Fund Of | Growth Fund vs. Growth Fund Of |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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