Correlation Between Clearbridge Aggressive and Western Asset
Can any of the company-specific risk be diversified away by investing in both Clearbridge Aggressive and Western Asset 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 Western Asset 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 Western Asset Managed, you can compare the effects of market volatilities on Clearbridge Aggressive and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Aggressive and Western Asset.
Diversification Opportunities for Clearbridge Aggressive and Western Asset
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Clearbridge and Western is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Aggressive Growth and Western Asset Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Managed 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Managed has no effect on the direction of Clearbridge Aggressive i.e., Clearbridge Aggressive and Western Asset go up and down completely randomly.
Pair Corralation between Clearbridge Aggressive and Western Asset
Assuming the 90 days horizon Clearbridge Aggressive Growth is expected to under-perform the Western Asset. In addition to that, Clearbridge Aggressive is 5.11 times more volatile than Western Asset Managed. It trades about -0.1 of its total potential returns per unit of risk. Western Asset Managed is currently generating about 0.18 per unit of volatility. If you would invest 1,492 in Western Asset Managed on November 28, 2024 and sell it today you would earn a total of 13.00 from holding Western Asset Managed or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Aggressive Growth vs. Western Asset Managed
Performance |
| Timeline |
| Clearbridge Aggressive |
| Western Asset Managed |
Clearbridge Aggressive and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Aggressive and Western Asset
The main advantage of trading using opposite Clearbridge Aggressive and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Aggressive position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Clearbridge Aggressive vs. Transamerica High Yield | Clearbridge Aggressive vs. Msift High Yield | Clearbridge Aggressive vs. Artisan High Income | Clearbridge Aggressive vs. Ab High Income |
| Western Asset vs. Fwnhtx | Western Asset vs. Aam Select Income | Western Asset vs. Fabwx | Western Asset vs. Wabmsx |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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