Correlation Between Vanguard Strategic and Clearbridge Small
Can any of the company-specific risk be diversified away by investing in both Vanguard Strategic and Clearbridge Small 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 Vanguard Strategic and Clearbridge Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Strategic Small Cap and Clearbridge Small Cap, you can compare the effects of market volatilities on Vanguard Strategic and Clearbridge Small 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 Vanguard Strategic with a short position of Clearbridge Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Strategic and Clearbridge Small.
Diversification Opportunities for Vanguard Strategic and Clearbridge Small
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Clearbridge is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Strategic Small Cap and Clearbridge Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Small Cap and Vanguard Strategic 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 Vanguard Strategic Small Cap are associated (or correlated) with Clearbridge Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Small Cap has no effect on the direction of Vanguard Strategic i.e., Vanguard Strategic and Clearbridge Small go up and down completely randomly.
Pair Corralation between Vanguard Strategic and Clearbridge Small
Assuming the 90 days horizon Vanguard Strategic is expected to generate 1.31 times less return on investment than Clearbridge Small. In addition to that, Vanguard Strategic is 1.08 times more volatile than Clearbridge Small Cap. It trades about 0.23 of its total potential returns per unit of risk. Clearbridge Small Cap is currently generating about 0.32 per unit of volatility. If you would invest 6,350 in Clearbridge Small Cap on November 10, 2024 and sell it today you would earn a total of 376.00 from holding Clearbridge Small Cap or generate 5.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Strategic Small Cap vs. Clearbridge Small Cap
Performance |
| Timeline |
| Vanguard Strategic |
| Clearbridge Small Cap |
Vanguard Strategic and Clearbridge Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Strategic and Clearbridge Small
The main advantage of trading using opposite Vanguard Strategic and Clearbridge Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Strategic position performs unexpectedly, Clearbridge Small 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 Small will offset losses from the drop in Clearbridge Small's long position.| Vanguard Strategic vs. Vanguard Explorer Value | Vanguard Strategic vs. Vanguard Strategic Equity | Vanguard Strategic vs. Vanguard Diversified Equity | Vanguard Strategic vs. Vanguard Mid Cap |
| Clearbridge Small vs. Wmcanx | Clearbridge Small vs. Fkhemx | Clearbridge Small vs. Ffcdax | Clearbridge Small vs. Wabmsx |
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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