Correlation Between Western Asset and Clearbridge Mid
Can any of the company-specific risk be diversified away by investing in both Western Asset and Clearbridge 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 Western Asset and Clearbridge Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset E and Clearbridge Mid Cap, you can compare the effects of market volatilities on Western Asset and Clearbridge 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 Western Asset with a short position of Clearbridge Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Clearbridge Mid.
Diversification Opportunities for Western Asset and Clearbridge Mid
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Clearbridge is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset E and Clearbridge Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Mid Cap 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 E are associated (or correlated) with Clearbridge Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Mid Cap has no effect on the direction of Western Asset i.e., Western Asset and Clearbridge Mid go up and down completely randomly.
Pair Corralation between Western Asset and Clearbridge Mid
Assuming the 90 days horizon Western Asset E is expected to generate 0.36 times more return on investment than Clearbridge Mid. However, Western Asset E is 2.81 times less risky than Clearbridge Mid. It trades about 0.25 of its potential returns per unit of risk. Clearbridge Mid Cap is currently generating about -0.21 per unit of risk. If you would invest 1,040 in Western Asset E on November 28, 2024 and sell it today you would earn a total of 17.00 from holding Western Asset E or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset E vs. Clearbridge Mid Cap
Performance |
| Timeline |
| Western Asset E |
| Clearbridge Mid Cap |
Western Asset and Clearbridge Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Clearbridge Mid
The main advantage of trading using opposite Western Asset and Clearbridge Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Clearbridge 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 Clearbridge Mid will offset losses from the drop in Clearbridge Mid's long position.| Western Asset vs. Stone Ridge Diversified | Western Asset vs. American Funds Conservative | Western Asset vs. Voya Solution Conservative | Western Asset vs. Tax Free Conservative Income |
| Clearbridge Mid vs. Calvert Large Cap | Clearbridge Mid vs. Guidemark Large Cap | Clearbridge Mid vs. Lord Abbett Affiliated | Clearbridge Mid vs. Tiaa Cref Large Cap Growth |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |