Correlation Between Oshaughnessy Market and Clearbridge Large

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

By analyzing existing cross correlation between Oshaughnessy Market Leaders and Clearbridge Large Cap, you can compare the effects of market volatilities on Oshaughnessy Market and Clearbridge Large 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 Oshaughnessy Market with a short position of Clearbridge Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oshaughnessy Market and Clearbridge Large.

Diversification Opportunities for Oshaughnessy Market and Clearbridge Large

0.99

Correlation Coefficient

Oshaughnessy Market  Clearbridge Large

No risk reduction

The 3 months correlation between Oshaughnessy and Clearbridge is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Oshaughnessy Market Leaders and Clearbridge Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Large Cap and Oshaughnessy Market 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 Oshaughnessy Market Leaders are associated (or correlated) with Clearbridge Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Large Cap has no effect on the direction of Oshaughnessy Market i.e., Oshaughnessy Market and Clearbridge Large go up and down completely randomly.

Pair Corralation between Oshaughnessy Market and Clearbridge Large

Assuming the 90 days horizon Oshaughnessy Market Leaders is expected to generate 1.16 times more return on investment than Clearbridge Large. However, Oshaughnessy Market is 1.16 times more volatile than Clearbridge Large Cap. It trades about 0.02 of its potential returns per unit of risk. Clearbridge Large Cap is currently generating about 0.0 per unit of risk. If you would invest  1,973  in Oshaughnessy Market Leaders on December 26, 2024 and sell it today you would earn a total of  20.00  from holding Oshaughnessy Market Leaders or generate 1.01% return on investment over 90 days.

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

Oshaughnessy Market Leaders  vs.  Clearbridge Large Cap

Oshaughnessy Market

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oshaughnessy Market Leaders are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Oshaughnessy Market is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Clearbridge Large Cap

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Oshaughnessy Market and Clearbridge Large

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

The idea behind Oshaughnessy Market Leaders and Clearbridge Large Cap 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.