Correlation Between Clearbridge Dividend and Western Asset
Can any of the company-specific risk be diversified away by investing in both Clearbridge Dividend and Western Asset 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 Dividend and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearbridge Dividend Strategy and Western Asset Intermediate, you can compare the effects of market volatilities on Clearbridge Dividend and Western Asset 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 Dividend with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Dividend and Western Asset.
Diversification Opportunities for Clearbridge Dividend and Western Asset
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Clearbridge and Western is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Dividend Strategy and Western Asset Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Interm and Clearbridge Dividend 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 Dividend Strategy are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Interm has no effect on the direction of Clearbridge Dividend i.e., Clearbridge Dividend and Western Asset go up and down completely randomly.
Pair Corralation between Clearbridge Dividend and Western Asset
Assuming the 90 days horizon Clearbridge Dividend Strategy is expected to generate 3.56 times more return on investment than Western Asset. However, Clearbridge Dividend is 3.56 times more volatile than Western Asset Intermediate. It trades about 0.11 of its potential returns per unit of risk. Western Asset Intermediate is currently generating about -0.13 per unit of risk. If you would invest 3,161 in Clearbridge Dividend Strategy on August 24, 2024 and sell it today you would earn a total of 59.00 from holding Clearbridge Dividend Strategy or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Dividend Strategy vs. Western Asset Intermediate
Performance |
| Timeline |
| Clearbridge Dividend |
| Western Asset Interm |
Clearbridge Dividend and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Dividend and Western Asset
The main advantage of trading using opposite Clearbridge Dividend and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Dividend position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Clearbridge Dividend vs. Dreyfusstandish Global Fixed | Clearbridge Dividend vs. Scharf Global Opportunity | Clearbridge Dividend vs. T Rowe Price | Clearbridge Dividend vs. The Hartford Global |
| Western Asset vs. Guggenheim Long Short | Western Asset vs. Astor Longshort Fund | Western Asset vs. Ultra Short Term Fixed | Western Asset vs. Old Westbury Short Term |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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