Correlation Between Clearbridge Large and Templeton Emerging
Can any of the company-specific risk be diversified away by investing in both Clearbridge Large and Templeton Emerging 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 Large and Templeton Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearbridge Large Cap and Templeton Emerging Markets, you can compare the effects of market volatilities on Clearbridge Large and Templeton Emerging 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 Large with a short position of Templeton Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Large and Templeton Emerging.
Diversification Opportunities for Clearbridge Large and Templeton Emerging
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clearbridge and Templeton is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Large Cap and Templeton Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Emerging and Clearbridge Large 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 Large Cap are associated (or correlated) with Templeton Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Emerging has no effect on the direction of Clearbridge Large i.e., Clearbridge Large and Templeton Emerging go up and down completely randomly.
Pair Corralation between Clearbridge Large and Templeton Emerging
Assuming the 90 days horizon Clearbridge Large Cap is expected to generate 1.9 times more return on investment than Templeton Emerging. However, Clearbridge Large is 1.9 times more volatile than Templeton Emerging Markets. It trades about 0.28 of its potential returns per unit of risk. Templeton Emerging Markets is currently generating about -0.2 per unit of risk. If you would invest 4,426 in Clearbridge Large Cap on August 28, 2024 and sell it today you would earn a total of 250.00 from holding Clearbridge Large Cap or generate 5.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Large Cap vs. Templeton Emerging Markets
Performance |
| Timeline |
| Clearbridge Large Cap |
| Templeton Emerging |
Clearbridge Large and Templeton Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Large and Templeton Emerging
The main advantage of trading using opposite Clearbridge Large and Templeton Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Large position performs unexpectedly, Templeton Emerging 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 Templeton Emerging will offset losses from the drop in Templeton Emerging's long position.| Clearbridge Large vs. T Rowe Price | Clearbridge Large vs. T Rowe Price | Clearbridge Large vs. Legg Mason Bw | Clearbridge Large vs. Federated Mdt Large |
| Templeton Emerging vs. Federated Mdt Large | Templeton Emerging vs. Legg Mason Bw | Templeton Emerging vs. Aqr Large Cap | Templeton Emerging vs. Quantitative U S |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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