Correlation Between Western Asset and Clearbridge Dividend
Can any of the company-specific risk be diversified away by investing in both Western Asset and Clearbridge Dividend 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 Dividend 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 Dividend Strategy, you can compare the effects of market volatilities on Western Asset and Clearbridge Dividend 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 Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Clearbridge Dividend.
Diversification Opportunities for Western Asset and Clearbridge Dividend
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Clearbridge is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset E and Clearbridge Dividend Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Dividend 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 Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Dividend has no effect on the direction of Western Asset i.e., Western Asset and Clearbridge Dividend go up and down completely randomly.
Pair Corralation between Western Asset and Clearbridge Dividend
Assuming the 90 days horizon Western Asset E is expected to under-perform the Clearbridge Dividend. But the mutual fund apears to be less risky and, when comparing its historical volatility, Western Asset E is 1.77 times less risky than Clearbridge Dividend. The mutual fund trades about -0.12 of its potential returns per unit of risk. The Clearbridge Dividend Strategy is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,077 in Clearbridge Dividend Strategy on September 12, 2024 and sell it today you would earn a total of 174.00 from holding Clearbridge Dividend Strategy or generate 5.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset E vs. Clearbridge Dividend Strategy
Performance |
| Timeline |
| Western Asset E |
| Clearbridge Dividend |
Western Asset and Clearbridge Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Clearbridge Dividend
The main advantage of trading using opposite Western Asset and Clearbridge Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Clearbridge Dividend 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 Dividend will offset losses from the drop in Clearbridge Dividend's long position.| Western Asset vs. Metropolitan West Total | Western Asset vs. SCOR PK | Western Asset vs. Morningstar Unconstrained Allocation | Western Asset vs. Thrivent High Yield |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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