Correlation Between Clearbridge Small and Clearbridge Select
Can any of the company-specific risk be diversified away by investing in both Clearbridge Small and Clearbridge Select 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 Clearbridge Select 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 Clearbridge Select Fund, you can compare the effects of market volatilities on Clearbridge Small and Clearbridge Select 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 Clearbridge Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Small and Clearbridge Select.
Diversification Opportunities for Clearbridge Small and Clearbridge Select
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Clearbridge and Clearbridge is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Small Cap and Clearbridge Select Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Select 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 Clearbridge Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Select has no effect on the direction of Clearbridge Small i.e., Clearbridge Small and Clearbridge Select go up and down completely randomly.
Pair Corralation between Clearbridge Small and Clearbridge Select
Assuming the 90 days horizon Clearbridge Small Cap is expected to under-perform the Clearbridge Select. In addition to that, Clearbridge Small is 1.43 times more volatile than Clearbridge Select Fund. It trades about -0.16 of its total potential returns per unit of risk. Clearbridge Select Fund is currently generating about -0.08 per unit of volatility. If you would invest 5,898 in Clearbridge Select Fund on November 29, 2024 and sell it today you would lose (312.00) from holding Clearbridge Select Fund or give up 5.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Small Cap vs. Clearbridge Select Fund
Performance |
| Timeline |
| Clearbridge Small Cap |
| Clearbridge Select |
Clearbridge Small and Clearbridge Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Small and Clearbridge Select
The main advantage of trading using opposite Clearbridge Small and Clearbridge Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Small position performs unexpectedly, Clearbridge Select 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 Select will offset losses from the drop in Clearbridge Select's long position.| Clearbridge Small vs. Ultra Short Fixed Income | Clearbridge Small vs. Ab Bond Inflation | Clearbridge Small vs. Doubleline Emerging Markets | Clearbridge Small vs. Artisan High Income |
| Clearbridge Select vs. Franklin Mutual Beacon | Clearbridge Select vs. Templeton Developing Markets | Clearbridge Select vs. Franklin Mutual Global | Clearbridge Select 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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