Correlation Between Clearbridge Mid and Western Asset
Can any of the company-specific risk be diversified away by investing in both Clearbridge Mid 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 Mid 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 Mid Cap and Western Asset Inflation, you can compare the effects of market volatilities on Clearbridge Mid 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 Mid with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Mid and Western Asset.
Diversification Opportunities for Clearbridge Mid and Western Asset
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Clearbridge and Western is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Mid Cap and Western Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Inflation 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 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 Inflation has no effect on the direction of Clearbridge Mid i.e., Clearbridge Mid and Western Asset go up and down completely randomly.
Pair Corralation between Clearbridge Mid and Western Asset
Assuming the 90 days horizon Clearbridge Mid Cap is expected to generate 4.0 times more return on investment than Western Asset. However, Clearbridge Mid is 4.0 times more volatile than Western Asset Inflation. It trades about 0.24 of its potential returns per unit of risk. Western Asset Inflation is currently generating about -0.12 per unit of risk. If you would invest 3,900 in Clearbridge Mid Cap on August 24, 2024 and sell it today you would earn a total of 242.00 from holding Clearbridge Mid Cap or generate 6.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Mid Cap vs. Western Asset Inflation
Performance |
| Timeline |
| Clearbridge Mid Cap |
| Western Asset Inflation |
Clearbridge Mid and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Mid and Western Asset
The main advantage of trading using opposite Clearbridge Mid and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Mid 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 Mid vs. Fam Equity Income Fund | Clearbridge Mid vs. Meridian Growth Fund | Clearbridge Mid vs. Muhlenkamp Fund Institutional | Clearbridge Mid vs. Royce Pennsylvania Mutual |
| Western Asset vs. Vanguard Inflation Protected Securities | Western Asset vs. Vanguard Inflation Protected Securities | Western Asset vs. American Funds Inflation | Western Asset vs. American Funds Inflation |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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