Correlation Between Clearbridge International and Counterpoint Tactical
Can any of the company-specific risk be diversified away by investing in both Clearbridge International and Counterpoint Tactical 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 International and Counterpoint Tactical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearbridge International Value and Counterpoint Tactical Municipal, you can compare the effects of market volatilities on Clearbridge International and Counterpoint Tactical 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 International with a short position of Counterpoint Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge International and Counterpoint Tactical.
Diversification Opportunities for Clearbridge International and Counterpoint Tactical
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Clearbridge and Counterpoint is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge International Valu and Counterpoint Tactical Municipa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Counterpoint Tactical and Clearbridge International 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 International Value are associated (or correlated) with Counterpoint Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Counterpoint Tactical has no effect on the direction of Clearbridge International i.e., Clearbridge International and Counterpoint Tactical go up and down completely randomly.
Pair Corralation between Clearbridge International and Counterpoint Tactical
Assuming the 90 days horizon Clearbridge International Value is expected to under-perform the Counterpoint Tactical. In addition to that, Clearbridge International is 2.5 times more volatile than Counterpoint Tactical Municipal. It trades about -0.14 of its total potential returns per unit of risk. Counterpoint Tactical Municipal is currently generating about 0.06 per unit of volatility. If you would invest 1,096 in Counterpoint Tactical Municipal on September 13, 2024 and sell it today you would earn a total of 9.00 from holding Counterpoint Tactical Municipal or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge International Valu vs. Counterpoint Tactical Municipa
Performance |
| Timeline |
| Clearbridge International |
| Counterpoint Tactical |
Clearbridge International and Counterpoint Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge International and Counterpoint Tactical
The main advantage of trading using opposite Clearbridge International and Counterpoint Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge International position performs unexpectedly, Counterpoint Tactical 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 Counterpoint Tactical will offset losses from the drop in Counterpoint Tactical's long position.The idea behind Clearbridge International Value and Counterpoint Tactical Municipal 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |