Correlation Between Clearbridge Mid and Calvert Global

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Can any of the company-specific risk be diversified away by investing in both Clearbridge Mid and Calvert Global 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 Mid and Calvert Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearbridge Mid Cap and Calvert Global Energy, you can compare the effects of market volatilities on Clearbridge Mid and Calvert Global 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 Mid with a short position of Calvert Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Mid and Calvert Global.

Diversification Opportunities for Clearbridge Mid and Calvert Global

-0.21
  Correlation Coefficient

Very good diversification

The 3 months correlation between Clearbridge and Calvert is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Mid Cap and Calvert Global Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Global Energy and Clearbridge Mid 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 Mid Cap are associated (or correlated) with Calvert Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Global Energy has no effect on the direction of Clearbridge Mid i.e., Clearbridge Mid and Calvert Global go up and down completely randomly.

Pair Corralation between Clearbridge Mid and Calvert Global

Assuming the 90 days horizon Clearbridge Mid Cap is expected to generate 0.93 times more return on investment than Calvert Global. However, Clearbridge Mid Cap is 1.07 times less risky than Calvert Global. It trades about 0.24 of its potential returns per unit of risk. Calvert Global Energy is currently generating about 0.02 per unit of risk. If you would invest  2,306  in Clearbridge Mid Cap on September 2, 2024 and sell it today you would earn a total of  316.00  from holding Clearbridge Mid Cap or generate 13.7% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Clearbridge Mid Cap  vs.  Calvert Global Energy

 Performance 
       Timeline  
Clearbridge Mid Cap 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Clearbridge Mid Cap are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Clearbridge Mid showed solid returns over the last few months and may actually be approaching a breakup point.
Calvert Global Energy 

Risk-Adjusted Performance

1 of 100

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

Clearbridge Mid and Calvert Global Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Clearbridge Mid and Calvert Global

The main advantage of trading using opposite Clearbridge Mid and Calvert Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge Mid position performs unexpectedly, Calvert Global 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 Calvert Global will offset losses from the drop in Calvert Global's long position.
The idea behind Clearbridge Mid Cap and Calvert Global Energy 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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