Correlation Between Clearbridge Aggressive and Qs Conservative

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

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

Diversification Opportunities for Clearbridge Aggressive and Qs Conservative

0.51

Correlation Coefficient

Clearbridge Aggressive  Qs Conservative

Very weak diversification

The 3 months correlation between Clearbridge and SCBCX is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Aggressive Growth and Qs Servative Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qs Servative Growth and Clearbridge Aggressive 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 Aggressive Growth are associated (or correlated) with Qs Conservative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qs Servative Growth has no effect on the direction of Clearbridge Aggressive i.e., Clearbridge Aggressive and Qs Conservative go up and down completely randomly.

Pair Corralation between Clearbridge Aggressive and Qs Conservative

Assuming the 90 days horizon Clearbridge Aggressive Growth is expected to under-perform the Qs Conservative. In addition to that, Clearbridge Aggressive is 9.09 times more volatile than Qs Servative Growth. It trades about -0.13 of its total potential returns per unit of risk. Qs Servative Growth is currently generating about -0.05 per unit of volatility. If you would invest  1,614  in Qs Servative Growth on December 1, 2024 and sell it today you would lose (29.00) from holding Qs Servative Growth or give up 1.8% of portfolio value over 90 days.

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

Clearbridge Aggressive Growth  vs.  Qs Servative Growth

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 fundamental 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.

Qs Servative Growth

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Clearbridge Aggressive and Qs Conservative

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

The idea behind Clearbridge Aggressive Growth and Qs Servative 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.