Correlation Between Clearbridge Energy and Highland Merger
Can any of the company-specific risk be diversified away by investing in both Clearbridge Energy and Highland Merger 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 Highland Merger 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 Highland Merger Arbitrage, you can compare the effects of market volatilities on Clearbridge Energy and Highland Merger 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 Highland Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Energy and Highland Merger.
Diversification Opportunities for Clearbridge Energy and Highland Merger
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Clearbridge and Highland is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Energy Mlp and Highland Merger Arbitrage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Merger Arbitrage 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 Highland Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Merger Arbitrage has no effect on the direction of Clearbridge Energy i.e., Clearbridge Energy and Highland Merger go up and down completely randomly.
Pair Corralation between Clearbridge Energy and Highland Merger
Assuming the 90 days horizon Clearbridge Energy Mlp is expected to generate 8.44 times more return on investment than Highland Merger. However, Clearbridge Energy is 8.44 times more volatile than Highland Merger Arbitrage. It trades about 0.13 of its potential returns per unit of risk. Highland Merger Arbitrage is currently generating about 0.17 per unit of risk. If you would invest 3,903 in Clearbridge Energy Mlp on August 29, 2024 and sell it today you would earn a total of 1,587 from holding Clearbridge Energy Mlp or generate 40.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Energy Mlp vs. Highland Merger Arbitrage
Performance |
| Timeline |
| Clearbridge Energy Mlp |
| Highland Merger Arbitrage |
Clearbridge Energy and Highland Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Energy and Highland Merger
The main advantage of trading using opposite Clearbridge Energy and Highland Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Energy position performs unexpectedly, Highland Merger 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 Highland Merger will offset losses from the drop in Highland Merger's long position.| Clearbridge Energy vs. Dreyfus Institutional Reserves | Clearbridge Energy vs. Institutional Fiduciary Trust | Clearbridge Energy vs. Legg Mason Partners | Clearbridge Energy vs. Usaa Mutual Funds |
| Highland Merger vs. Vanguard Short Term Government | Highland Merger vs. Nuveen Minnesota Municipal | Highland Merger vs. Bbh Intermediate Municipal | Highland Merger vs. Oklahoma Municipal Fund |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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