Correlation Between Clearbridge Small and Clearbridge Value
Can any of the company-specific risk be diversified away by investing in both Clearbridge Small and Clearbridge Value 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 Value 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 Value Trust, you can compare the effects of market volatilities on Clearbridge Small and Clearbridge Value 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 Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Small and Clearbridge Value.
Diversification Opportunities for Clearbridge Small and Clearbridge Value
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Clearbridge and Clearbridge is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Small Cap and Clearbridge Value Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Value Trust 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 Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Value Trust has no effect on the direction of Clearbridge Small i.e., Clearbridge Small and Clearbridge Value go up and down completely randomly.
Pair Corralation between Clearbridge Small and Clearbridge Value
Assuming the 90 days horizon Clearbridge Small Cap is expected to generate 1.6 times more return on investment than Clearbridge Value. However, Clearbridge Small is 1.6 times more volatile than Clearbridge Value Trust. It trades about 0.2 of its potential returns per unit of risk. Clearbridge Value Trust is currently generating about 0.19 per unit of risk. If you would invest 3,625 in Clearbridge Small Cap on August 24, 2024 and sell it today you would earn a total of 237.00 from holding Clearbridge Small Cap or generate 6.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Clearbridge Small Cap vs. Clearbridge Value Trust
Performance |
| Timeline |
| Clearbridge Small Cap |
| Clearbridge Value Trust |
Clearbridge Small and Clearbridge Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Small and Clearbridge Value
The main advantage of trading using opposite Clearbridge Small and Clearbridge Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Small position performs unexpectedly, Clearbridge Value 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 Value will offset losses from the drop in Clearbridge Value's long position.| Clearbridge Small vs. The Hartford Equity | Clearbridge Small vs. Ab Select Equity | Clearbridge Small vs. Federated Equity Income | Clearbridge Small vs. The Hartford Equity |
| Clearbridge Value vs. Invesco Technology Fund | Clearbridge Value vs. Red Oak Technology | Clearbridge Value vs. Blackrock Science Technology | Clearbridge Value vs. Vanguard Information Technology |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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