Correlation Between Clearbridge Energy and Nuveen Louisiana
Can any of the company-specific risk be diversified away by investing in both Clearbridge Energy and Nuveen Louisiana 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 Nuveen Louisiana 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 Nuveen Louisiana Municipal, you can compare the effects of market volatilities on Clearbridge Energy and Nuveen Louisiana 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 Nuveen Louisiana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Energy and Nuveen Louisiana.
Diversification Opportunities for Clearbridge Energy and Nuveen Louisiana
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Clearbridge and Nuveen is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Energy Mlp and Nuveen Louisiana Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Louisiana Mun 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 Nuveen Louisiana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Louisiana Mun has no effect on the direction of Clearbridge Energy i.e., Clearbridge Energy and Nuveen Louisiana go up and down completely randomly.
Pair Corralation between Clearbridge Energy and Nuveen Louisiana
Assuming the 90 days horizon Clearbridge Energy Mlp is expected to generate 5.27 times more return on investment than Nuveen Louisiana. However, Clearbridge Energy is 5.27 times more volatile than Nuveen Louisiana Municipal. It trades about 0.13 of its potential returns per unit of risk. Nuveen Louisiana Municipal is currently generating about 0.07 per unit of risk. If you would invest 3,758 in Clearbridge Energy Mlp on September 14, 2024 and sell it today you would earn a total of 1,497 from holding Clearbridge Energy Mlp or generate 39.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Energy Mlp vs. Nuveen Louisiana Municipal
Performance |
| Timeline |
| Clearbridge Energy Mlp |
| Nuveen Louisiana Mun |
Clearbridge Energy and Nuveen Louisiana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Energy and Nuveen Louisiana
The main advantage of trading using opposite Clearbridge Energy and Nuveen Louisiana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Energy position performs unexpectedly, Nuveen Louisiana 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 Nuveen Louisiana will offset losses from the drop in Nuveen Louisiana's long position.| Clearbridge Energy vs. Vanguard Total Stock | Clearbridge Energy vs. Vanguard 500 Index | Clearbridge Energy vs. Vanguard Total Stock | Clearbridge Energy vs. Vanguard Total Stock |
| Nuveen Louisiana vs. Nuveen Small Cap | Nuveen Louisiana vs. Nuveen Real Estate | Nuveen Louisiana vs. Nuveen Real Estate | Nuveen Louisiana vs. Nuveen Preferred Securities |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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