Correlation Between Brandes Core and Brandes Global
Can any of the company-specific risk be diversified away by investing in both Brandes Core and Brandes Global 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 Global 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 Global Equity, you can compare the effects of market volatilities on Brandes Core and Brandes Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brandes Core and Brandes Global.
Diversification Opportunities for Brandes Core and Brandes Global
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brandes and Brandes is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Brandes E Plus and Brandes Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brandes Global Equity 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brandes Global Equity has no effect on the direction of Brandes Core i.e., Brandes Core and Brandes Global go up and down completely randomly.
Pair Corralation between Brandes Core and Brandes Global
Assuming the 90 days horizon Brandes Core is expected to generate 4.61 times less return on investment than Brandes Global. But when comparing it to its historical volatility, Brandes E Plus is 2.11 times less risky than Brandes Global. It trades about 0.05 of its potential returns per unit of risk. Brandes Global Equity is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,184 in Brandes Global Equity on August 30, 2024 and sell it today you would earn a total of 53.00 from holding Brandes Global Equity or generate 1.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brandes E Plus vs. Brandes Global Equity
Performance |
| Timeline |
| Brandes E Plus |
| Brandes Global Equity |
Brandes Core and Brandes Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brandes Core and Brandes Global
The main advantage of trading using opposite Brandes Core and Brandes Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brandes Core position performs unexpectedly, Brandes Global 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 Global will offset losses from the drop in Brandes Global's long position.| Brandes Core vs. Volumetric Fund Volumetric | Brandes Core vs. Balanced Fund Investor | Brandes Core vs. Rbb Fund | Brandes Core vs. Abr 7525 Volatility |
| Brandes Global vs. Firsthand Alternative Energy | Brandes Global vs. World Energy Fund | Brandes Global vs. Goldman Sachs Mlp | Brandes Global vs. Gmo Resources |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |