Correlation Between Western Asset and Clearbridge Small
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and Clearbridge Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Intermediate and Clearbridge Small Cap, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of Clearbridge Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Clearbridge Small.
Diversification Opportunities for Western Asset and Clearbridge Small
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Clearbridge is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Intermediate 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 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 Intermediate 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 Western Asset i.e., Western Asset and Clearbridge Small go up and down completely randomly.
Pair Corralation between Western Asset and Clearbridge Small
Assuming the 90 days horizon Western Asset Intermediate is expected to under-perform the Clearbridge Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Western Asset Intermediate is 6.11 times less risky than Clearbridge Small. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Clearbridge Small Cap is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 7,235 in Clearbridge Small Cap on August 27, 2024 and sell it today you would earn a total of 506.00 from holding Clearbridge Small Cap or generate 6.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Intermediate vs. Clearbridge Small Cap
Performance |
| Timeline |
| Western Asset Interm |
| Clearbridge Small Cap |
Western Asset and Clearbridge Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Clearbridge Small
The main advantage of trading using opposite Western Asset and Clearbridge Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. Clearbridge Aggressive Growth | Western Asset vs. Clearbridge Small Cap | Western Asset vs. Qs International Equity | Western Asset vs. Clearbridge Appreciation Fund |
| Clearbridge Small vs. Ab High Income | Clearbridge Small vs. Metropolitan West High | Clearbridge Small vs. Needham Aggressive Growth | Clearbridge Small vs. Ab Global Risk |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |