Correlation Between Western Asset and Clearbridge Select
Can any of the company-specific risk be diversified away by investing in both Western Asset and Clearbridge Select 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 Select 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 Select Fund, you can compare the effects of market volatilities on Western Asset and Clearbridge Select 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 Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Clearbridge Select.
Diversification Opportunities for Western Asset and Clearbridge Select
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and Clearbridge is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset E and Clearbridge Select Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Select 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 Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Select has no effect on the direction of Western Asset i.e., Western Asset and Clearbridge Select go up and down completely randomly.
Pair Corralation between Western Asset and Clearbridge Select
Assuming the 90 days horizon Western Asset is expected to generate 8.89 times less return on investment than Clearbridge Select. But when comparing it to its historical volatility, Western Asset E is 2.03 times less risky than Clearbridge Select. It trades about 0.02 of its potential returns per unit of risk. Clearbridge Select Fund is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,866 in Clearbridge Select Fund on September 3, 2024 and sell it today you would earn a total of 2,032 from holding Clearbridge Select Fund or generate 52.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset E vs. Clearbridge Select Fund
Performance |
| Timeline |
| Western Asset E |
| Clearbridge Select |
Western Asset and Clearbridge Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Clearbridge Select
The main advantage of trading using opposite Western Asset and Clearbridge Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Clearbridge Select 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 Select will offset losses from the drop in Clearbridge Select's long position.| Western Asset vs. Metropolitan West Total | Western Asset vs. Metropolitan West Total | Western Asset vs. Pimco Total Return | Western Asset vs. Total Return Fund |
| Clearbridge Select vs. Advent Claymore Convertible | Clearbridge Select vs. Gabelli Convertible And | Clearbridge Select vs. Calamos Dynamic Convertible | Clearbridge Select vs. Allianzgi Convertible Income |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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