Correlation Between Small Cap and Clearbridge Dividend
Can any of the company-specific risk be diversified away by investing in both Small Cap and Clearbridge Dividend 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 Small Cap and Clearbridge Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Stock and Clearbridge Dividend Strategy, you can compare the effects of market volatilities on Small Cap and Clearbridge Dividend 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 Small Cap with a short position of Clearbridge Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Clearbridge Dividend.
Diversification Opportunities for Small Cap and Clearbridge Dividend
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Small and Clearbridge is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Stock and Clearbridge Dividend Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Dividend and Small Cap 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 Small Cap Stock are associated (or correlated) with Clearbridge Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Dividend has no effect on the direction of Small Cap i.e., Small Cap and Clearbridge Dividend go up and down completely randomly.
Pair Corralation between Small Cap and Clearbridge Dividend
Assuming the 90 days horizon Small Cap Stock is expected to generate 1.97 times more return on investment than Clearbridge Dividend. However, Small Cap is 1.97 times more volatile than Clearbridge Dividend Strategy. It trades about 0.21 of its potential returns per unit of risk. Clearbridge Dividend Strategy is currently generating about 0.18 per unit of risk. If you would invest 1,162 in Small Cap Stock on April 30, 2025 and sell it today you would earn a total of 175.00 from holding Small Cap Stock or generate 15.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Cap Stock vs. Clearbridge Dividend Strategy
Performance |
| Timeline |
| Small Cap Stock |
| Clearbridge Dividend |
Small Cap and Clearbridge Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Clearbridge Dividend
The main advantage of trading using opposite Small Cap and Clearbridge Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap position performs unexpectedly, Clearbridge Dividend 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 Dividend will offset losses from the drop in Clearbridge Dividend's long position.| Small Cap vs. Goldman Sachs Financial | Small Cap vs. Vanguard Financials Index | Small Cap vs. Mesirow Financial Small | Small Cap vs. Blackrock Financial Institutions |
| Clearbridge Dividend vs. Putnam Global Technology | Clearbridge Dividend vs. T Rowe Price | Clearbridge Dividend vs. Victory Rs Science | Clearbridge Dividend vs. T Rowe Price |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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