Correlation Between Clearbridge Energy and Pace Municipal
Can any of the company-specific risk be diversified away by investing in both Clearbridge Energy and Pace Municipal 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 Pace Municipal 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 Pace Municipal Fixed, you can compare the effects of market volatilities on Clearbridge Energy and Pace Municipal 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 Pace Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Energy and Pace Municipal.
Diversification Opportunities for Clearbridge Energy and Pace Municipal
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Clearbridge and Pace is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Energy Mlp and Pace Municipal Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Municipal Fixed 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 Pace Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Municipal Fixed has no effect on the direction of Clearbridge Energy i.e., Clearbridge Energy and Pace Municipal go up and down completely randomly.
Pair Corralation between Clearbridge Energy and Pace Municipal
Assuming the 90 days horizon Clearbridge Energy Mlp is expected to generate 5.87 times more return on investment than Pace Municipal. However, Clearbridge Energy is 5.87 times more volatile than Pace Municipal Fixed. It trades about 0.14 of its potential returns per unit of risk. Pace Municipal Fixed is currently generating about -0.33 per unit of risk. If you would invest 5,157 in Clearbridge Energy Mlp on October 16, 2024 and sell it today you would earn a total of 165.00 from holding Clearbridge Energy Mlp or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearbridge Energy Mlp vs. Pace Municipal Fixed
Performance |
| Timeline |
| Clearbridge Energy Mlp |
| Pace Municipal Fixed |
Clearbridge Energy and Pace Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Energy and Pace Municipal
The main advantage of trading using opposite Clearbridge Energy and Pace Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Energy position performs unexpectedly, Pace Municipal 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 Pace Municipal will offset losses from the drop in Pace Municipal's long position.| Clearbridge Energy vs. Short Precious Metals | Clearbridge Energy vs. James Balanced Golden | Clearbridge Energy vs. Oppenheimer Gold Special | Clearbridge Energy vs. First Eagle Gold |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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