Correlation Between Clearbridge Small and Franklin California
Can any of the company-specific risk be diversified away by investing in both Clearbridge Small and Franklin California 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 Small and Franklin California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearbridge Small Cap and Franklin California Tax Free, you can compare the effects of market volatilities on Clearbridge Small and Franklin California 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 Small with a short position of Franklin California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Small and Franklin California.
Diversification Opportunities for Clearbridge Small and Franklin California
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clearbridge and Franklin is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Small Cap and Franklin California Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin California Tax and Clearbridge Small 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 Small Cap are associated (or correlated) with Franklin California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin California Tax has no effect on the direction of Clearbridge Small i.e., Clearbridge Small and Franklin California go up and down completely randomly.
Pair Corralation between Clearbridge Small and Franklin California
Assuming the 90 days horizon Clearbridge Small Cap is expected to generate 4.69 times more return on investment than Franklin California. However, Clearbridge Small is 4.69 times more volatile than Franklin California Tax Free. It trades about 0.02 of its potential returns per unit of risk. Franklin California Tax Free is currently generating about 0.06 per unit of risk. If you would invest 3,627 in Clearbridge Small Cap on September 1, 2024 and sell it today you would earn a total of 399.00 from holding Clearbridge Small Cap or generate 11.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Small Cap vs. Franklin California Tax Free
Performance |
| Timeline |
| Clearbridge Small Cap |
| Franklin California Tax |
Clearbridge Small and Franklin California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Small and Franklin California
The main advantage of trading using opposite Clearbridge Small and Franklin California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Small position performs unexpectedly, Franklin California 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 California will offset losses from the drop in Franklin California's long position.| Clearbridge Small vs. Pimco Funds | Clearbridge Small vs. Ashmore Emerging Markets | Clearbridge Small vs. John Hancock Money | Clearbridge Small vs. Transamerica Funds |
| Franklin California vs. Franklin Mutual Beacon | Franklin California vs. Templeton Developing Markets | Franklin California vs. Franklin Mutual Global | Franklin California 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |