Correlation Between Clearbridge Energy and Aqr Small
Can any of the company-specific risk be diversified away by investing in both Clearbridge Energy and Aqr 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 Clearbridge Energy and Aqr Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearbridge Energy Mlp and Aqr Small Cap, you can compare the effects of market volatilities on Clearbridge Energy and Aqr 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 Clearbridge Energy with a short position of Aqr Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Energy and Aqr Small.
Diversification Opportunities for Clearbridge Energy and Aqr Small
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Clearbridge and Aqr is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Energy Mlp and Aqr Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Small Cap and Clearbridge Energy 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 Clearbridge Energy Mlp are associated (or correlated) with Aqr Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Small Cap has no effect on the direction of Clearbridge Energy i.e., Clearbridge Energy and Aqr Small go up and down completely randomly.
Pair Corralation between Clearbridge Energy and Aqr Small
Assuming the 90 days horizon Clearbridge Energy Mlp is expected to generate 0.75 times more return on investment than Aqr Small. However, Clearbridge Energy Mlp is 1.34 times less risky than Aqr Small. It trades about 0.16 of its potential returns per unit of risk. Aqr Small Cap is currently generating about 0.1 per unit of risk. If you would invest 3,707 in Clearbridge Energy Mlp on September 3, 2024 and sell it today you would earn a total of 1,875 from holding Clearbridge Energy Mlp or generate 50.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Energy Mlp vs. Aqr Small Cap
Performance |
| Timeline |
| Clearbridge Energy Mlp |
| Aqr Small Cap |
Clearbridge Energy and Aqr Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Energy and Aqr Small
The main advantage of trading using opposite Clearbridge Energy and Aqr Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Energy position performs unexpectedly, Aqr 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 Aqr Small will offset losses from the drop in Aqr Small's long position.| Clearbridge Energy vs. Energy Basic Materials | Clearbridge Energy vs. Tortoise Energy Independence | Clearbridge Energy vs. Fidelity Advisor Energy | Clearbridge Energy vs. Dreyfus Natural Resources |
| Aqr Small vs. Ab High Income | Aqr Small vs. Goldman Sachs High | Aqr Small vs. Lgm Risk Managed | Aqr Small vs. Guggenheim 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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