Correlation Between Dell Technologies and ClearBridge Dividend

Can any of the company-specific risk be diversified away by investing in both Dell Technologies and ClearBridge Dividend 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 Dell Technologies and ClearBridge Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dell Technologies and ClearBridge Dividend Strategy, you can compare the effects of market volatilities on Dell Technologies and ClearBridge Dividend 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 Dell Technologies with a short position of ClearBridge Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dell Technologies and ClearBridge Dividend.

Diversification Opportunities for Dell Technologies and ClearBridge Dividend

0.08

Correlation Coefficient

Dell Technologies  ClearBridge Dividend

Significant diversification

The 3 months correlation between Dell and ClearBridge is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Dell Technologies and ClearBridge Dividend Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearBridge Dividend and Dell Technologies 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 Dell Technologies are associated (or correlated) with ClearBridge Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearBridge Dividend has no effect on the direction of Dell Technologies i.e., Dell Technologies and ClearBridge Dividend go up and down completely randomly.

Pair Corralation between Dell Technologies and ClearBridge Dividend

Given the investment horizon of 90 days Dell Technologies is expected to under-perform the ClearBridge Dividend. In addition to that, Dell Technologies is 4.28 times more volatile than ClearBridge Dividend Strategy. It trades about -0.1 of its total potential returns per unit of risk. ClearBridge Dividend Strategy is currently generating about 0.02 per unit of volatility. If you would invest  5,079  in ClearBridge Dividend Strategy on December 29, 2024 and sell it today you would earn a total of  43.00  from holding ClearBridge Dividend Strategy or generate 0.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Dell Technologies  vs.  ClearBridge Dividend Strategy

Dell Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dell Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

ClearBridge Dividend

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ClearBridge Dividend Strategy are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, ClearBridge Dividend is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Dell Technologies and ClearBridge Dividend

The main advantage of trading using opposite Dell Technologies and ClearBridge Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dell Technologies position performs unexpectedly, ClearBridge Dividend 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 ClearBridge Dividend will offset losses from the drop in ClearBridge Dividend's long position.

The idea behind Dell Technologies and ClearBridge Dividend Strategy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.