Correlation Between Clearbridge Aggressive and International Investors
Can any of the company-specific risk be diversified away by investing in both Clearbridge Aggressive and International Investors 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 International Investors 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 International Investors Gold, you can compare the effects of market volatilities on Clearbridge Aggressive and International Investors 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 International Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Aggressive and International Investors.
Diversification Opportunities for Clearbridge Aggressive and International Investors
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Clearbridge and International is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Aggressive Growth and International Investors Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Investors 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 International Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Investors has no effect on the direction of Clearbridge Aggressive i.e., Clearbridge Aggressive and International Investors go up and down completely randomly.
Pair Corralation between Clearbridge Aggressive and International Investors
Assuming the 90 days horizon Clearbridge Aggressive is expected to generate 6.99 times less return on investment than International Investors. But when comparing it to its historical volatility, Clearbridge Aggressive Growth is 1.06 times less risky than International Investors. It trades about 0.01 of its potential returns per unit of risk. International Investors Gold is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 891.00 in International Investors Gold on September 1, 2024 and sell it today you would earn a total of 316.00 from holding International Investors Gold or generate 35.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Clearbridge Aggressive Growth vs. International Investors Gold
Performance |
| Timeline |
| Clearbridge Aggressive |
| International Investors |
Clearbridge Aggressive and International Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Aggressive and International Investors
The main advantage of trading using opposite Clearbridge Aggressive and International Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Aggressive position performs unexpectedly, International Investors 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 International Investors will offset losses from the drop in International Investors' long position.| Clearbridge Aggressive vs. Clearbridge Small Cap | Clearbridge Aggressive vs. Qs International Equity | Clearbridge Aggressive vs. Clearbridge Appreciation Fund | Clearbridge Aggressive vs. Legg Mason Bw |
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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