Correlation Between Clearbridge Mid and Ishares Municipal
Can any of the company-specific risk be diversified away by investing in both Clearbridge Mid and Ishares Municipal 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 Mid and Ishares Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearbridge Mid Cap and Ishares Municipal Bond, you can compare the effects of market volatilities on Clearbridge Mid and Ishares Municipal 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 Mid with a short position of Ishares Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Mid and Ishares Municipal.
Diversification Opportunities for Clearbridge Mid and Ishares Municipal
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Clearbridge and Ishares is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Mid Cap and Ishares Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ishares Municipal Bond and Clearbridge Mid 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 Mid Cap are associated (or correlated) with Ishares Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ishares Municipal Bond has no effect on the direction of Clearbridge Mid i.e., Clearbridge Mid and Ishares Municipal go up and down completely randomly.
Pair Corralation between Clearbridge Mid and Ishares Municipal
Assuming the 90 days horizon Clearbridge Mid Cap is expected to generate 3.85 times more return on investment than Ishares Municipal. However, Clearbridge Mid is 3.85 times more volatile than Ishares Municipal Bond. It trades about 0.06 of its potential returns per unit of risk. Ishares Municipal Bond is currently generating about 0.07 per unit of risk. If you would invest 2,125 in Clearbridge Mid Cap on August 31, 2024 and sell it today you would earn a total of 487.00 from holding Clearbridge Mid Cap or generate 22.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Mid Cap vs. Ishares Municipal Bond
Performance |
| Timeline |
| Clearbridge Mid Cap |
| Ishares Municipal Bond |
Clearbridge Mid and Ishares Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Mid and Ishares Municipal
The main advantage of trading using opposite Clearbridge Mid and Ishares Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Mid position performs unexpectedly, Ishares Municipal 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 Ishares Municipal will offset losses from the drop in Ishares Municipal's long position.| Clearbridge Mid vs. Calvert Global Energy | Clearbridge Mid vs. Ivy Energy Fund | Clearbridge Mid vs. Oil Gas Ultrasector | Clearbridge Mid vs. Jennison Natural Resources |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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