Correlation Between Clearbridge Energy and Energy Services
Can any of the company-specific risk be diversified away by investing in both Clearbridge Energy and Energy Services 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 Energy Services 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 Energy Services Fund, you can compare the effects of market volatilities on Clearbridge Energy and Energy Services 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 Energy Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Energy and Energy Services.
Diversification Opportunities for Clearbridge Energy and Energy Services
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Clearbridge and ENERGY is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Energy Mlp and Energy Services Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Services 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 Energy Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Services has no effect on the direction of Clearbridge Energy i.e., Clearbridge Energy and Energy Services go up and down completely randomly.
Pair Corralation between Clearbridge Energy and Energy Services
Assuming the 90 days horizon Clearbridge Energy Mlp is expected to generate 0.62 times more return on investment than Energy Services. However, Clearbridge Energy Mlp is 1.6 times less risky than Energy Services. It trades about 0.13 of its potential returns per unit of risk. Energy Services Fund is currently generating about 0.0 per unit of risk. If you would invest 3,781 in Clearbridge Energy Mlp on September 1, 2024 and sell it today you would earn a total of 1,702 from holding Clearbridge Energy Mlp or generate 45.01% 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. Energy Services Fund
Performance |
| Timeline |
| Clearbridge Energy Mlp |
| Energy Services |
Clearbridge Energy and Energy Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Energy and Energy Services
The main advantage of trading using opposite Clearbridge Energy and Energy Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Energy position performs unexpectedly, Energy Services 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 Energy Services will offset losses from the drop in Energy Services' long position.| Clearbridge Energy vs. Touchstone Large Cap | Clearbridge Energy vs. Strategic Allocation Aggressive | Clearbridge Energy vs. T Rowe Price | Clearbridge Energy vs. T Rowe Price |
| Energy Services vs. Basic Materials Fund | Energy Services vs. Electronics Fund Investor | Energy Services vs. Health Care Fund | Energy Services vs. Precious Metals 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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