Correlation Between Clearbridge Energy and Frost Credit
Can any of the company-specific risk be diversified away by investing in both Clearbridge Energy and Frost Credit 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 Frost Credit 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 Frost Credit Fund, you can compare the effects of market volatilities on Clearbridge Energy and Frost Credit 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 Frost Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Energy and Frost Credit.
Diversification Opportunities for Clearbridge Energy and Frost Credit
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Clearbridge and Frost is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Energy Mlp and Frost Credit Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frost Credit 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 Frost Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frost Credit has no effect on the direction of Clearbridge Energy i.e., Clearbridge Energy and Frost Credit go up and down completely randomly.
Pair Corralation between Clearbridge Energy and Frost Credit
Assuming the 90 days horizon Clearbridge Energy Mlp is expected to generate 6.59 times more return on investment than Frost Credit. However, Clearbridge Energy is 6.59 times more volatile than Frost Credit Fund. It trades about 0.13 of its potential returns per unit of risk. Frost Credit Fund is currently generating about 0.23 per unit of risk. If you would invest 3,330 in Clearbridge Energy Mlp on September 4, 2024 and sell it today you would earn a total of 2,252 from holding Clearbridge Energy Mlp or generate 67.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 99.73% |
Values | Daily Returns |
Clearbridge Energy Mlp vs. Frost Credit Fund
Performance |
Timeline |
Clearbridge Energy Mlp |
Frost Credit |
Clearbridge Energy and Frost Credit Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Clearbridge Energy and Frost Credit
The main advantage of trading using opposite Clearbridge Energy and Frost Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Energy position performs unexpectedly, Frost Credit 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 Frost Credit will offset losses from the drop in Frost Credit's long position.Clearbridge Energy vs. Chase Growth Fund | Clearbridge Energy vs. Nationwide Growth Fund | Clearbridge Energy vs. Rational Defensive Growth | Clearbridge Energy vs. Pace Large Growth |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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