Correlation Between Ford and Clearbridge Aggressive

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

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

Diversification Opportunities for Ford and Clearbridge Aggressive

0.23

Correlation Coefficient

Ford  Clearbridge Aggressive

Modest diversification

The 3 months correlation between Ford and Clearbridge is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Clearbridge Aggressive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Aggressive and Ford 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 Ford Motor 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 Ford i.e., Ford and Clearbridge Aggressive go up and down completely randomly.

Pair Corralation between Ford and Clearbridge Aggressive

Taking into account the 90-day investment horizon Ford is expected to generate 4.06 times less return on investment than Clearbridge Aggressive. In addition to that, Ford is 1.81 times more volatile than Clearbridge Aggressive Growth. It trades about 0.0 of its total potential returns per unit of risk. Clearbridge Aggressive Growth is currently generating about 0.02 per unit of volatility. If you would invest  12,648  in Clearbridge Aggressive Growth on December 1, 2024 and sell it today you would earn a total of  675.00  from holding Clearbridge Aggressive Growth or generate 5.34% return on investment over 90 days.

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

Ford Motor  vs.  Clearbridge Aggressive Growth

Ford Motor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ford Motor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Clearbridge Aggressive

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clearbridge Aggressive Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Ford and Clearbridge Aggressive

The main advantage of trading using opposite Ford and Clearbridge Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford 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 Ford Motor 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..