Correlation Between Clearbridge Small and Templeton Global
Can any of the company-specific risk be diversified away by investing in both Clearbridge Small and Templeton Global 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 Templeton Global 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 Templeton Global Total, you can compare the effects of market volatilities on Clearbridge Small and Templeton Global 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 Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Small and Templeton Global.
Diversification Opportunities for Clearbridge Small and Templeton Global
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Clearbridge and Templeton is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Small Cap and Templeton Global Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global Total 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 Templeton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Global Total has no effect on the direction of Clearbridge Small i.e., Clearbridge Small and Templeton Global go up and down completely randomly.
Pair Corralation between Clearbridge Small and Templeton Global
Assuming the 90 days horizon Clearbridge Small Cap is expected to generate 2.07 times more return on investment than Templeton Global. However, Clearbridge Small is 2.07 times more volatile than Templeton Global Total. It trades about 0.03 of its potential returns per unit of risk. Templeton Global Total is currently generating about 0.02 per unit of risk. If you would invest 3,444 in Clearbridge Small Cap on September 3, 2024 and sell it today you would earn a total of 601.00 from holding Clearbridge Small Cap or generate 17.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Small Cap vs. Templeton Global Total
Performance |
| Timeline |
| Clearbridge Small Cap |
| Templeton Global Total |
Clearbridge Small and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Small and Templeton Global
The main advantage of trading using opposite Clearbridge Small and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Small position performs unexpectedly, Templeton Global 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 Global will offset losses from the drop in Templeton Global's long position.| Clearbridge Small vs. Fabxx | Clearbridge Small vs. Fa 529 Aggressive | Clearbridge Small vs. Abr 7525 Volatility | Clearbridge Small vs. T Rowe Price |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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