Correlation Between Clearbridge Energy and Federated Global
Can any of the company-specific risk be diversified away by investing in both Clearbridge Energy and Federated Global 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 Federated Global 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 Federated Global Allocation, you can compare the effects of market volatilities on Clearbridge Energy and Federated Global 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 Federated Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Energy and Federated Global.
Diversification Opportunities for Clearbridge Energy and Federated Global
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Clearbridge and Federated is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Energy Mlp and Federated Global Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Global All 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 Federated Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Global All has no effect on the direction of Clearbridge Energy i.e., Clearbridge Energy and Federated Global go up and down completely randomly.
Pair Corralation between Clearbridge Energy and Federated Global
Assuming the 90 days horizon Clearbridge Energy is expected to generate 1.15 times less return on investment than Federated Global. In addition to that, Clearbridge Energy is 4.13 times more volatile than Federated Global Allocation. It trades about 0.05 of its total potential returns per unit of risk. Federated Global Allocation is currently generating about 0.22 per unit of volatility. If you would invest 2,067 in Federated Global Allocation on September 13, 2024 and sell it today you would earn a total of 32.00 from holding Federated Global Allocation or generate 1.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Energy Mlp vs. Federated Global Allocation
Performance |
| Timeline |
| Clearbridge Energy Mlp |
| Federated Global All |
Clearbridge Energy and Federated Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Energy and Federated Global
The main advantage of trading using opposite Clearbridge Energy and Federated Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Energy position performs unexpectedly, Federated Global 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 Federated Global will offset losses from the drop in Federated Global's long position.| Clearbridge Energy vs. Mid Cap Growth | Clearbridge Energy vs. Pace Smallmedium Growth | Clearbridge Energy vs. Ftfa Franklin Templeton Growth | Clearbridge Energy vs. Rational Defensive Growth |
| Federated Global vs. Federated Hermes Mdt | Federated Global vs. Federated Mdt Large | Federated Global vs. Federated High Income | Federated Global vs. Federated Hermes Sdg |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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