Correlation Between Nasdaq 100 and Clearbridge Energy
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Clearbridge Energy 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 Nasdaq 100 and Clearbridge Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 2x Strategy and Clearbridge Energy Mlp, you can compare the effects of market volatilities on Nasdaq 100 and Clearbridge Energy 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 Nasdaq 100 with a short position of Clearbridge Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Clearbridge Energy.
Diversification Opportunities for Nasdaq 100 and Clearbridge Energy
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nasdaq and Clearbridge is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Clearbridge Energy Mlp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Energy Mlp and Nasdaq 100 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 Nasdaq 100 2x Strategy are associated (or correlated) with Clearbridge Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Energy Mlp has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Clearbridge Energy go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Clearbridge Energy
Assuming the 90 days horizon Nasdaq 100 is expected to generate 3.04 times less return on investment than Clearbridge Energy. In addition to that, Nasdaq 100 is 2.21 times more volatile than Clearbridge Energy Mlp. It trades about 0.02 of its total potential returns per unit of risk. Clearbridge Energy Mlp is currently generating about 0.13 per unit of volatility. If you would invest 4,434 in Clearbridge Energy Mlp on October 19, 2024 and sell it today you would earn a total of 1,067 from holding Clearbridge Energy Mlp or generate 24.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.31% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Clearbridge Energy Mlp
Performance |
| Timeline |
| Nasdaq 100 2x |
| Clearbridge Energy Mlp |
Nasdaq 100 and Clearbridge Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Clearbridge Energy
The main advantage of trading using opposite Nasdaq 100 and Clearbridge Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Clearbridge Energy 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 Energy will offset losses from the drop in Clearbridge Energy's long position.| Nasdaq 100 vs. Sp 500 2x | Nasdaq 100 vs. Inverse Nasdaq 100 2x | Nasdaq 100 vs. Inverse Sp 500 | Nasdaq 100 vs. Ultra Nasdaq 100 Profunds |
| Clearbridge Energy vs. American Funds Government | Clearbridge Energy vs. Blackrock Government Bond | Clearbridge Energy vs. Wesmark Government Bond | Clearbridge Energy vs. Schwab Government Money |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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