Correlation Between Western Asset and Clearbridge Value
Can any of the company-specific risk be diversified away by investing in both Western Asset and Clearbridge Value 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 Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Smash and Clearbridge Value Trust, you can compare the effects of market volatilities on Western Asset and Clearbridge Value 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 Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Clearbridge Value.
Diversification Opportunities for Western Asset and Clearbridge Value
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and Clearbridge is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Smash and Clearbridge Value Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Value Trust 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 Smash are associated (or correlated) with Clearbridge Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Value Trust has no effect on the direction of Western Asset i.e., Western Asset and Clearbridge Value go up and down completely randomly.
Pair Corralation between Western Asset and Clearbridge Value
Assuming the 90 days horizon Western Asset is expected to generate 3.1 times less return on investment than Clearbridge Value. But when comparing it to its historical volatility, Western Asset Smash is 2.14 times less risky than Clearbridge Value. It trades about 0.04 of its potential returns per unit of risk. Clearbridge Value Trust is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 11,405 in Clearbridge Value Trust on August 26, 2024 and sell it today you would earn a total of 2,906 from holding Clearbridge Value Trust or generate 25.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Smash vs. Clearbridge Value Trust
Performance |
| Timeline |
| Western Asset Smash |
| Clearbridge Value Trust |
Western Asset and Clearbridge Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Clearbridge Value
The main advantage of trading using opposite Western Asset and Clearbridge Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Clearbridge Value 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 Value will offset losses from the drop in Clearbridge Value's long position.| Western Asset vs. Franklin Mutual Beacon | Western Asset vs. Templeton Developing Markets | Western Asset vs. Franklin Mutual Global | Western Asset vs. Franklin Mutual Global |
| Clearbridge Value vs. Quantitative U S | Clearbridge Value vs. Aqr Large Cap | Clearbridge Value vs. Massmutual Select T | Clearbridge Value vs. Qs Large Cap |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |