Correlation Between Jhancock Short and Clearbridge Small

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

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

Diversification Opportunities for Jhancock Short and Clearbridge Small

0.0

Correlation Coefficient

Jhancock Short  Clearbridge Small

Pay attention - limited upside

The 3 months correlation between Jhancock and Clearbridge is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Short Duration and Clearbridge Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Small Cap and Jhancock Short 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 Jhancock Short Duration are associated (or correlated) with Clearbridge Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Small Cap has no effect on the direction of Jhancock Short i.e., Jhancock Short and Clearbridge Small go up and down completely randomly.

Pair Corralation between Jhancock Short and Clearbridge Small

Assuming the 90 days horizon Jhancock Short is expected to generate 70.43 times less return on investment than Clearbridge Small. But when comparing it to its historical volatility, Jhancock Short Duration is 10.31 times less risky than Clearbridge Small. It trades about 0.03 of its potential returns per unit of risk. Clearbridge Small Cap is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  3,971  in Clearbridge Small Cap on September 5, 2024 and sell it today you would earn a total of  658.00  from holding Clearbridge Small Cap or generate 16.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Jhancock Short Duration  vs.  Clearbridge Small Cap

Jhancock Short Duration

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jhancock Short Duration are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Jhancock Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Clearbridge Small Cap

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Clearbridge Small Cap are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Clearbridge Small showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jhancock Short and Clearbridge Small

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

The idea behind Jhancock Short Duration and Clearbridge Small 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .