Correlation Between Clearbridge Dividend and Congress Mid
Can any of the company-specific risk be diversified away by investing in both Clearbridge Dividend and Congress Mid 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 Congress Mid 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 Congress Mid Cap, you can compare the effects of market volatilities on Clearbridge Dividend and Congress Mid 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 Congress Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Dividend and Congress Mid.
Diversification Opportunities for Clearbridge Dividend and Congress Mid
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Clearbridge and Congress is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Dividend Strategy and Congress Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Congress Mid Cap 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 Congress Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Congress Mid Cap has no effect on the direction of Clearbridge Dividend i.e., Clearbridge Dividend and Congress Mid go up and down completely randomly.
Pair Corralation between Clearbridge Dividend and Congress Mid
Assuming the 90 days horizon Clearbridge Dividend is expected to generate 1.2 times less return on investment than Congress Mid. But when comparing it to its historical volatility, Clearbridge Dividend Strategy is 1.77 times less risky than Congress Mid. It trades about 0.33 of its potential returns per unit of risk. Congress Mid Cap is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,597 in Congress Mid Cap on September 1, 2024 and sell it today you would earn a total of 149.00 from holding Congress Mid Cap or generate 5.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Clearbridge Dividend Strategy vs. Congress Mid Cap
Performance |
| Timeline |
| Clearbridge Dividend |
| Congress Mid Cap |
Clearbridge Dividend and Congress Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Dividend and Congress Mid
The main advantage of trading using opposite Clearbridge Dividend and Congress Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Dividend position performs unexpectedly, Congress Mid 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 Congress Mid will offset losses from the drop in Congress Mid's long position.| Clearbridge Dividend vs. Franklin Mutual Global | Clearbridge Dividend vs. Franklin Growth Fund | Clearbridge Dividend vs. Franklin Dynatech Fund | Clearbridge Dividend vs. Franklin Strategic Income |
| Congress Mid vs. Polen Growth Fund | Congress Mid vs. Segall Bryant Hamill | Congress Mid vs. Diamond Hill All | Congress Mid vs. Wells Fargo Index |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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