Correlation Between SCOR PK and Clearbridge Aggressive
Can any of the company-specific risk be diversified away by investing in both SCOR PK and Clearbridge Aggressive 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 SCOR PK and Clearbridge Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and Clearbridge Aggressive Growth, you can compare the effects of market volatilities on SCOR PK and Clearbridge Aggressive 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 SCOR PK with a short position of Clearbridge Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Clearbridge Aggressive.
Diversification Opportunities for SCOR PK and Clearbridge Aggressive
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SCOR and Clearbridge is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Clearbridge Aggressive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Aggressive and SCOR PK 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 SCOR PK are associated (or correlated) with Clearbridge Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Aggressive has no effect on the direction of SCOR PK i.e., SCOR PK and Clearbridge Aggressive go up and down completely randomly.
Pair Corralation between SCOR PK and Clearbridge Aggressive
Assuming the 90 days horizon SCOR PK is expected to generate 2.75 times more return on investment than Clearbridge Aggressive. However, SCOR PK is 2.75 times more volatile than Clearbridge Aggressive Growth. It trades about 0.2 of its potential returns per unit of risk. Clearbridge Aggressive Growth is currently generating about 0.28 per unit of risk. If you would invest 221.00 in SCOR PK on August 28, 2024 and sell it today you would earn a total of 29.00 from holding SCOR PK or generate 13.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCOR PK vs. Clearbridge Aggressive Growth
Performance |
| Timeline |
| SCOR PK |
| Clearbridge Aggressive |
SCOR PK and Clearbridge Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR PK and Clearbridge Aggressive
The main advantage of trading using opposite SCOR PK and Clearbridge Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK position performs unexpectedly, Clearbridge Aggressive 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 Aggressive will offset losses from the drop in Clearbridge Aggressive's long position.| SCOR PK vs. Invesco High Income | SCOR PK vs. Blackrock Muniholdings Ny | SCOR PK vs. MFS Investment Grade | SCOR PK vs. Federated Premier Municipal |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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