Correlation Between Clearbridge Value and Us Government

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

By analyzing existing cross correlation between Clearbridge Value Trust and Us Government Securities, you can compare the effects of market volatilities on Clearbridge Value and Us Government 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 Value with a short position of Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge Value and Us Government.

Diversification Opportunities for Clearbridge Value and Us Government

0.82

Correlation Coefficient

Clearbridge Value  Us Government

Very poor diversification

The 3 months correlation between Clearbridge and UGSDX is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge Value Trust and Us Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Securities and Clearbridge Value 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 Value Trust are associated (or correlated) with Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Securities has no effect on the direction of Clearbridge Value i.e., Clearbridge Value and Us Government go up and down completely randomly.

Pair Corralation between Clearbridge Value and Us Government

Assuming the 90 days horizon Clearbridge Value Trust is expected to generate 11.34 times more return on investment than Us Government. However, Clearbridge Value is 11.34 times more volatile than Us Government Securities. It trades about 0.1 of its potential returns per unit of risk. Us Government Securities is currently generating about 0.13 per unit of risk. If you would invest  11,890  in Clearbridge Value Trust on May 3, 2025 and sell it today you would earn a total of  526.00  from holding Clearbridge Value Trust or generate 4.42% return on investment over 90 days.

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

Clearbridge Value Trust  vs.  Us Government Securities

Clearbridge Value Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Clearbridge Value Trust are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Clearbridge Value is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Us Government Securities

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Us Government Securities are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Us Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Clearbridge Value and Us Government

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

The idea behind Clearbridge Value Trust and Us Government Securities 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.