Correlation Between Qs Sp and Clearbridge Aggressive

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

By analyzing existing cross correlation between Qs Sp 500 and Clearbridge Aggressive Growth, you can compare the effects of market volatilities on Qs Sp 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 Qs Sp with a short position of Clearbridge Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qs Sp and Clearbridge Aggressive.

Diversification Opportunities for Qs Sp and Clearbridge Aggressive

0.06

Correlation Coefficient

Qs Sp  Clearbridge Aggressive

Significant diversification

The 3 months correlation between SBSDX and Clearbridge is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Qs Sp 500 and Clearbridge Aggressive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Aggressive and Qs Sp 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 Qs Sp 500 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 Qs Sp i.e., Qs Sp and Clearbridge Aggressive go up and down completely randomly.

Pair Corralation between Qs Sp and Clearbridge Aggressive

Assuming the 90 days horizon Qs Sp 500 is expected to generate 0.17 times more return on investment than Clearbridge Aggressive. However, Qs Sp 500 is 5.75 times less risky than Clearbridge Aggressive. It trades about 0.1 of its potential returns per unit of risk. Clearbridge Aggressive Growth is currently generating about -0.1 per unit of risk. If you would invest  4,550  in Qs Sp 500 on October 26, 2024 and sell it today you would earn a total of  227.00  from holding Qs Sp 500 or generate 4.99% return on investment over 90 days.

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

Qs Sp 500  vs.  Clearbridge Aggressive Growth

Qs Sp 500

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Qs Sp 500 are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Qs Sp 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 February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Qs Sp and Clearbridge Aggressive

The main advantage of trading using opposite Qs Sp and Clearbridge Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qs Sp 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 Qs Sp 500 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.

Check out your portfolio center.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.