Correlation Between Western Asset and Clearbridge Appreciation
Can any of the company-specific risk be diversified away by investing in both Western Asset and Clearbridge Appreciation 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 Western Asset and Clearbridge Appreciation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Managed and Clearbridge Appreciation Fund, you can compare the effects of market volatilities on Western Asset and Clearbridge Appreciation 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 Western Asset with a short position of Clearbridge Appreciation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Clearbridge Appreciation.
Diversification Opportunities for Western Asset and Clearbridge Appreciation
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Clearbridge is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Managed and Clearbridge Appreciation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Appreciation and Western Asset 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 Western Asset Managed are associated (or correlated) with Clearbridge Appreciation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Appreciation has no effect on the direction of Western Asset i.e., Western Asset and Clearbridge Appreciation go up and down completely randomly.
Pair Corralation between Western Asset and Clearbridge Appreciation
Assuming the 90 days horizon Western Asset is expected to generate 7.34 times less return on investment than Clearbridge Appreciation. But when comparing it to its historical volatility, Western Asset Managed is 3.23 times less risky than Clearbridge Appreciation. It trades about 0.06 of its potential returns per unit of risk. Clearbridge Appreciation Fund is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 3,159 in Clearbridge Appreciation Fund on August 28, 2024 and sell it today you would earn a total of 662.00 from holding Clearbridge Appreciation Fund or generate 20.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Managed vs. Clearbridge Appreciation Fund
Performance |
| Timeline |
| Western Asset Managed |
| Clearbridge Appreciation |
Western Asset and Clearbridge Appreciation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Clearbridge Appreciation
The main advantage of trading using opposite Western Asset and Clearbridge Appreciation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Clearbridge Appreciation 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 Appreciation will offset losses from the drop in Clearbridge Appreciation's long position.| Western Asset vs. Transamerica Financial Life | Western Asset vs. Vanguard Financials Index | Western Asset vs. Fidelity Advisor Financial | Western Asset vs. Prudential Jennison Financial |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Stocks Directory Find actively traded stocks across global markets |