Correlation Between Dreyfus/standish and Clearbridge Aggressive

Can any of the company-specific risk be diversified away by investing in both Dreyfus/standish and Clearbridge Aggressive 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 Dreyfus/standish and Clearbridge Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dreyfusstandish Global Fixed and Clearbridge Aggressive Growth, you can compare the effects of market volatilities on Dreyfus/standish and Clearbridge Aggressive 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 Dreyfus/standish with a short position of Clearbridge Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus/standish and Clearbridge Aggressive.

Diversification Opportunities for Dreyfus/standish and Clearbridge Aggressive

-0.6

Correlation Coefficient

Dreyfus/standish  Clearbridge Aggressive

Excellent diversification

The 3 months correlation between Dreyfus/standish and Clearbridge is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfusstandish Global Fixed and Clearbridge Aggressive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Aggressive and Dreyfus/standish 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 Dreyfusstandish Global Fixed are associated (or correlated) with Clearbridge Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Aggressive has no effect on the direction of Dreyfus/standish i.e., Dreyfus/standish and Clearbridge Aggressive go up and down completely randomly.

Pair Corralation between Dreyfus/standish and Clearbridge Aggressive

Assuming the 90 days horizon Dreyfus/standish is expected to generate 201.5 times less return on investment than Clearbridge Aggressive. But when comparing it to its historical volatility, Dreyfusstandish Global Fixed is 4.96 times less risky than Clearbridge Aggressive. It trades about 0.01 of its potential returns per unit of risk. Clearbridge Aggressive Growth is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  13,929  in Clearbridge Aggressive Growth on September 4, 2024 and sell it today you would earn a total of  1,839  from holding Clearbridge Aggressive Growth or generate 13.2% return on investment over 90 days.

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

Dreyfusstandish Global Fixed  vs.  Clearbridge Aggressive Growth

Dreyfusstandish Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dreyfusstandish Global Fixed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Dreyfus/standish is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Clearbridge Aggressive

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Clearbridge Aggressive Growth are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Clearbridge Aggressive showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dreyfus/standish and Clearbridge Aggressive

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

The idea behind Dreyfusstandish Global Fixed and Clearbridge Aggressive Growth 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.