Correlation Between Clearbridge Aggressive and Franklin New
Can any of the company-specific risk be diversified away by investing in both Clearbridge Aggressive and Franklin New 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 Franklin New 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 Franklin New York, you can compare the effects of market volatilities on Clearbridge Aggressive and Franklin New 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 Franklin New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Aggressive and Franklin New.
Diversification Opportunities for Clearbridge Aggressive and Franklin New
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clearbridge and Franklin is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Aggressive Growth and Franklin New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin New York 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 Franklin New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin New York has no effect on the direction of Clearbridge Aggressive i.e., Clearbridge Aggressive and Franklin New go up and down completely randomly.
Pair Corralation between Clearbridge Aggressive and Franklin New
Assuming the 90 days horizon Clearbridge Aggressive Growth is expected to generate 5.14 times more return on investment than Franklin New. However, Clearbridge Aggressive is 5.14 times more volatile than Franklin New York. It trades about 0.19 of its potential returns per unit of risk. Franklin New York is currently generating about 0.22 per unit of risk. If you would invest 14,949 in Clearbridge Aggressive Growth on August 30, 2024 and sell it today you would earn a total of 747.00 from holding Clearbridge Aggressive Growth or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Aggressive Growth vs. Franklin New York
Performance |
| Timeline |
| Clearbridge Aggressive |
| Franklin New York |
Clearbridge Aggressive and Franklin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Aggressive and Franklin New
The main advantage of trading using opposite Clearbridge Aggressive and Franklin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Aggressive position performs unexpectedly, Franklin New 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 Franklin New will offset losses from the drop in Franklin New's long position.| Clearbridge Aggressive vs. Dodge Cox Stock | Clearbridge Aggressive vs. Pace Large Value | Clearbridge Aggressive vs. Qs Large Cap | Clearbridge Aggressive vs. Aqr Large Cap |
| Franklin New vs. Franklin Mutual Beacon | Franklin New vs. Templeton Developing Markets | Franklin New vs. Franklin Mutual Global | Franklin New vs. Franklin Mutual Global |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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