Correlation Between ClearBridge All and Vanguard Growth
Can any of the company-specific risk be diversified away by investing in both ClearBridge All and Vanguard Growth 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 All and Vanguard Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ClearBridge All Cap and Vanguard Growth Index, you can compare the effects of market volatilities on ClearBridge All and Vanguard Growth 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 All with a short position of Vanguard Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of ClearBridge All and Vanguard Growth.
Diversification Opportunities for ClearBridge All and Vanguard Growth
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ClearBridge and Vanguard is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding ClearBridge All Cap and Vanguard Growth Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Growth Index and ClearBridge All 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 All Cap are associated (or correlated) with Vanguard Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Growth Index has no effect on the direction of ClearBridge All i.e., ClearBridge All and Vanguard Growth go up and down completely randomly.
Pair Corralation between ClearBridge All and Vanguard Growth
Given the investment horizon of 90 days ClearBridge All Cap is expected to generate 0.94 times more return on investment than Vanguard Growth. However, ClearBridge All Cap is 1.07 times less risky than Vanguard Growth. It trades about 0.05 of its potential returns per unit of risk. Vanguard Growth Index is currently generating about 0.05 per unit of risk. If you would invest 3,659 in ClearBridge All Cap on January 25, 2024 and sell it today you would earn a total of 1,331 from holding ClearBridge All Cap or generate 36.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
ClearBridge All Cap vs. Vanguard Growth Index
Performance |
Timeline |
ClearBridge All Cap |
Vanguard Growth Index |
ClearBridge All and Vanguard Growth Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ClearBridge All and Vanguard Growth
The main advantage of trading using opposite ClearBridge All and Vanguard Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ClearBridge All position performs unexpectedly, Vanguard Growth 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 Vanguard Growth will offset losses from the drop in Vanguard Growth's long position.ClearBridge All vs. iShares Small Cap | ClearBridge All vs. Pacer Cash Cows | ClearBridge All vs. GXO Logistics | ClearBridge All vs. Amplify CWP Enhanced |
Vanguard Growth vs. iShares Small Cap | Vanguard Growth vs. Pacer Cash Cows | Vanguard Growth vs. GXO Logistics | Vanguard Growth vs. Amplify CWP Enhanced |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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