Correlation Between Clearbridge Large and Clearbridge International

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

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

Diversification Opportunities for Clearbridge Large and Clearbridge International

0.07

Correlation Coefficient

Clearbridge Large  Clearbridge International

Significant diversification

The 3 months correlation between Clearbridge and Clearbridge is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Large Cap and Clearbridge International Grow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge International and Clearbridge Large 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 Large Cap are associated (or correlated) with Clearbridge International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge International has no effect on the direction of Clearbridge Large i.e., Clearbridge Large and Clearbridge International go up and down completely randomly.

Pair Corralation between Clearbridge Large and Clearbridge International

Assuming the 90 days horizon Clearbridge Large Cap is expected to under-perform the Clearbridge International. In addition to that, Clearbridge Large is 1.61 times more volatile than Clearbridge International Growth. It trades about -0.16 of its total potential returns per unit of risk. Clearbridge International Growth is currently generating about 0.08 per unit of volatility. If you would invest  6,178  in Clearbridge International Growth on December 2, 2024 and sell it today you would earn a total of  220.00  from holding Clearbridge International Growth or generate 3.56% return on investment over 90 days.

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

Clearbridge Large Cap  vs.  Clearbridge International Grow

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 weak performance in the last few months, the Fund's technical and 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.

Clearbridge International

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Clearbridge International Growth are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Clearbridge International 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 Large and Clearbridge International

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

The idea behind Clearbridge Large Cap and Clearbridge International 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.