Correlation Between Clearbridge Energy and American Beacon
Can any of the company-specific risk be diversified away by investing in both Clearbridge Energy and American Beacon 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 American Beacon 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 American Beacon Twentyfour, you can compare the effects of market volatilities on Clearbridge Energy and American Beacon 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 American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Energy and American Beacon.
Diversification Opportunities for Clearbridge Energy and American Beacon
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Clearbridge and American is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Energy Mlp and American Beacon Twentyfour in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Twen 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 American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Twen has no effect on the direction of Clearbridge Energy i.e., Clearbridge Energy and American Beacon go up and down completely randomly.
Pair Corralation between Clearbridge Energy and American Beacon
Assuming the 90 days horizon Clearbridge Energy Mlp is expected to generate 12.3 times more return on investment than American Beacon. However, Clearbridge Energy is 12.3 times more volatile than American Beacon Twentyfour. It trades about 0.13 of its potential returns per unit of risk. American Beacon Twentyfour is currently generating about 0.27 per unit of risk. If you would invest 3,725 in Clearbridge Energy Mlp on September 12, 2024 and sell it today you would earn a total of 1,484 from holding Clearbridge Energy Mlp or generate 39.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Clearbridge Energy Mlp vs. American Beacon Twentyfour
Performance |
| Timeline |
| Clearbridge Energy Mlp |
| American Beacon Twen |
Clearbridge Energy and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge Energy and American Beacon
The main advantage of trading using opposite Clearbridge Energy and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Energy position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon'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 |
| American Beacon vs. Fidelity Advisor Energy | American Beacon vs. Icon Natural Resources | American Beacon vs. Hennessy Bp Energy | American Beacon vs. Clearbridge Energy Mlp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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