Correlation Between Clearbridge Appreciation and Clearbridge International
Can any of the company-specific risk be diversified away by investing in both Clearbridge Appreciation and Clearbridge International 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 International 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 International Growth, you can compare the effects of market volatilities on Clearbridge Appreciation and Clearbridge International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Appreciation and Clearbridge International.
Diversification Opportunities for Clearbridge Appreciation and Clearbridge International
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clearbridge and Clearbridge is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Appreciation Fund and Clearbridge International Grow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge International 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge International has no effect on the direction of Clearbridge Appreciation i.e., Clearbridge Appreciation and Clearbridge International go up and down completely randomly.
Pair Corralation between Clearbridge Appreciation and Clearbridge International
Assuming the 90 days horizon Clearbridge Appreciation Fund is expected to generate 0.81 times more return on investment than Clearbridge International. However, Clearbridge Appreciation Fund is 1.23 times less risky than Clearbridge International. It trades about 0.11 of its potential returns per unit of risk. Clearbridge International Growth is currently generating about 0.03 per unit of risk. If you would invest 3,298 in Clearbridge Appreciation Fund on August 27, 2024 and sell it today you would earn a total of 503.00 from holding Clearbridge Appreciation Fund or generate 15.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Appreciation Fund vs. Clearbridge International Grow
Performance |
| Timeline |
| Clearbridge Appreciation |
| Clearbridge International |
Clearbridge Appreciation and Clearbridge International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Appreciation and Clearbridge International
The main advantage of trading using opposite Clearbridge Appreciation and Clearbridge International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Appreciation position performs unexpectedly, Clearbridge International 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 International will offset losses from the drop in Clearbridge International's long position.The idea behind Clearbridge Appreciation Fund and Clearbridge International Growth 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.
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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