Correlation Between Clearbridge Large and Icon Financial
Can any of the company-specific risk be diversified away by investing in both Clearbridge Large and Icon Financial 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 Large and Icon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearbridge Large Cap and Icon Financial Fund, you can compare the effects of market volatilities on Clearbridge Large and Icon Financial 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 Large with a short position of Icon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Large and Icon Financial.
Diversification Opportunities for Clearbridge Large and Icon Financial
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clearbridge and Icon is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Large Cap and Icon Financial Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Financial and Clearbridge Large 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 Large Cap are associated (or correlated) with Icon Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Financial has no effect on the direction of Clearbridge Large i.e., Clearbridge Large and Icon Financial go up and down completely randomly.
Pair Corralation between Clearbridge Large and Icon Financial
Assuming the 90 days horizon Clearbridge Large Cap is expected to generate 0.4 times more return on investment than Icon Financial. However, Clearbridge Large Cap is 2.52 times less risky than Icon Financial. It trades about 0.18 of its potential returns per unit of risk. Icon Financial Fund is currently generating about -0.03 per unit of risk. If you would invest 7,448 in Clearbridge Large Cap on September 12, 2024 and sell it today you would earn a total of 729.00 from holding Clearbridge Large Cap or generate 9.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Large Cap vs. Icon Financial Fund
Performance |
| Timeline |
| Clearbridge Large Cap |
| Icon Financial |
Clearbridge Large and Icon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Large and Icon Financial
The main advantage of trading using opposite Clearbridge Large and Icon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Large position performs unexpectedly, Icon Financial 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 Icon Financial will offset losses from the drop in Icon Financial's long position.| Clearbridge Large vs. Baillie Gifford Health | Clearbridge Large vs. Baron Health Care | Clearbridge Large vs. Blackrock Health Sciences | Clearbridge Large vs. Deutsche Health And |
| Icon Financial vs. Locorr Market Trend | Icon Financial vs. Transamerica Emerging Markets | Icon Financial vs. Ashmore Emerging Markets | Icon Financial vs. Kinetics Market Opportunities |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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