Correlation Between Clearbridge Dividend and Clearbridge Aggressive

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

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

Diversification Opportunities for Clearbridge Dividend and Clearbridge Aggressive

0.63

Correlation Coefficient

Clearbridge Dividend  Clearbridge Aggressive

Poor diversification

The 3 months correlation between Clearbridge and Clearbridge is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Dividend Strategy and Clearbridge Aggressive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Aggressive and Clearbridge Dividend 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 Dividend Strategy 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 Clearbridge Dividend i.e., Clearbridge Dividend and Clearbridge Aggressive go up and down completely randomly.

Pair Corralation between Clearbridge Dividend and Clearbridge Aggressive

Assuming the 90 days horizon Clearbridge Dividend Strategy is expected to generate 0.31 times more return on investment than Clearbridge Aggressive. However, Clearbridge Dividend Strategy is 3.28 times less risky than Clearbridge Aggressive. It trades about 0.03 of its potential returns per unit of risk. Clearbridge Aggressive Growth is currently generating about -0.04 per unit of risk. If you would invest  2,738  in Clearbridge Dividend Strategy on September 30, 2024 and sell it today you would earn a total of  237.00  from holding Clearbridge Dividend Strategy or generate 8.66% return on investment over 90 days.

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

Clearbridge Dividend Strategy  vs.  Clearbridge Aggressive Growth

Clearbridge Dividend

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clearbridge Dividend Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Clearbridge Dividend 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

0 of 100

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 fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Clearbridge Dividend and Clearbridge Aggressive

The main advantage of trading using opposite Clearbridge Dividend and Clearbridge Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Dividend 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 Clearbridge Dividend Strategy 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.