Correlation Between Brandes Core and Brandes Core
Can any of the company-specific risk be diversified away by investing in both Brandes Core and Brandes Core 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 Brandes Core and Brandes Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brandes E Plus and Brandes E Plus, you can compare the effects of market volatilities on Brandes Core and Brandes Core 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 Brandes Core with a short position of Brandes Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brandes Core and Brandes Core.
Diversification Opportunities for Brandes Core and Brandes Core
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Brandes and Brandes is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Brandes E Plus and Brandes E Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brandes E Plus and Brandes Core 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 Brandes E Plus are associated (or correlated) with Brandes Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brandes E Plus has no effect on the direction of Brandes Core i.e., Brandes Core and Brandes Core go up and down completely randomly.
Pair Corralation between Brandes Core and Brandes Core
Assuming the 90 days horizon Brandes E Plus is expected to under-perform the Brandes Core. But the mutual fund apears to be less risky and, when comparing its historical volatility, Brandes E Plus is 1.05 times less risky than Brandes Core. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Brandes E Plus is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 844.00 in Brandes E Plus on November 2, 2024 and sell it today you would lose (13.00) from holding Brandes E Plus or give up 1.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brandes E Plus vs. Brandes E Plus
Performance |
| Timeline |
| Brandes E Plus |
| Brandes E Plus |
Brandes Core and Brandes Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brandes Core and Brandes Core
The main advantage of trading using opposite Brandes Core and Brandes Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brandes Core position performs unexpectedly, Brandes Core 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 Brandes Core will offset losses from the drop in Brandes Core's long position.| Brandes Core vs. Smead Value Fund | Brandes Core vs. Dodge Cox Stock | Brandes Core vs. Guidemark Large Cap | Brandes Core vs. Qs Large Cap |
| Brandes Core vs. Old Westbury Municipal | Brandes Core vs. Ambrus Core Bond | Brandes Core vs. Ab Bond Inflation | Brandes Core vs. Inflation Adjusted Bond Fund |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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