Correlation Between Clearbridge Energy and Siit Large

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

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

Diversification Opportunities for Clearbridge Energy and Siit Large

0.27

Correlation Coefficient

Clearbridge Energy  Siit Large

Modest diversification

The 3 months correlation between Clearbridge and Siit is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Energy Mlp and Siit Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Large Cap and Clearbridge Energy 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 Energy Mlp are associated (or correlated) with Siit Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Large Cap has no effect on the direction of Clearbridge Energy i.e., Clearbridge Energy and Siit Large go up and down completely randomly.

Pair Corralation between Clearbridge Energy and Siit Large

Assuming the 90 days horizon Clearbridge Energy Mlp is expected to generate 0.32 times more return on investment than Siit Large. However, Clearbridge Energy Mlp is 3.12 times less risky than Siit Large. It trades about -0.02 of its potential returns per unit of risk. Siit Large Cap is currently generating about -0.25 per unit of risk. If you would invest  5,251  in Clearbridge Energy Mlp on October 9, 2024 and sell it today you would lose (38.00) from holding Clearbridge Energy Mlp or give up 0.72% of portfolio value over 90 days.

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

Clearbridge Energy Mlp  vs.  Siit Large Cap

Clearbridge Energy Mlp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Clearbridge Energy Mlp are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Clearbridge Energy may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Siit Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Siit 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 basic 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 Clearbridge Energy and Siit Large

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

The idea behind Clearbridge Energy Mlp and Siit 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.