Correlation Between Clearbridge Appreciation and Clearbridge Mid
Can any of the company-specific risk be diversified away by investing in both Clearbridge Appreciation and Clearbridge Mid 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 Appreciation and Clearbridge Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearbridge Appreciation Fund and Clearbridge Mid Cap, you can compare the effects of market volatilities on Clearbridge Appreciation and Clearbridge Mid 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 Appreciation with a short position of Clearbridge Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Appreciation and Clearbridge Mid.
Diversification Opportunities for Clearbridge Appreciation and Clearbridge Mid
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Clearbridge and Clearbridge is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Appreciation Fund and Clearbridge Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Mid Cap and Clearbridge Appreciation 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 Appreciation Fund are associated (or correlated) with Clearbridge Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Mid Cap has no effect on the direction of Clearbridge Appreciation i.e., Clearbridge Appreciation and Clearbridge Mid go up and down completely randomly.
Pair Corralation between Clearbridge Appreciation and Clearbridge Mid
Assuming the 90 days horizon Clearbridge Appreciation is expected to generate 2.25 times less return on investment than Clearbridge Mid. But when comparing it to its historical volatility, Clearbridge Appreciation Fund is 1.34 times less risky than Clearbridge Mid. It trades about 0.19 of its potential returns per unit of risk. Clearbridge Mid Cap is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 2,421 in Clearbridge Mid Cap on August 31, 2024 and sell it today you would earn a total of 191.00 from holding Clearbridge Mid Cap or generate 7.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Appreciation Fund vs. Clearbridge Mid Cap
Performance |
| Timeline |
| Clearbridge Appreciation |
| Clearbridge Mid Cap |
Clearbridge Appreciation and Clearbridge Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Appreciation and Clearbridge Mid
The main advantage of trading using opposite Clearbridge Appreciation and Clearbridge Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Appreciation position performs unexpectedly, Clearbridge Mid 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 Mid will offset losses from the drop in Clearbridge Mid's long position.The idea behind Clearbridge Appreciation Fund and Clearbridge Mid Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Clearbridge Mid vs. Calvert Global Energy | Clearbridge Mid vs. Ivy Energy Fund | Clearbridge Mid vs. Oil Gas Ultrasector | Clearbridge Mid vs. Jennison Natural Resources |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |