Correlation Between Brandes Emerging and Brandes Global
Can any of the company-specific risk be diversified away by investing in both Brandes Emerging 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 Emerging 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 Emerging Markets and Brandes Global Equity, you can compare the effects of market volatilities on Brandes Emerging 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 Emerging with a short position of Brandes Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brandes Emerging and Brandes Global.
Diversification Opportunities for Brandes Emerging and Brandes Global
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Brandes and Brandes is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Brandes Emerging Markets 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 Emerging 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 Emerging Markets 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 Emerging i.e., Brandes Emerging and Brandes Global go up and down completely randomly.
Pair Corralation between Brandes Emerging and Brandes Global
Assuming the 90 days horizon Brandes Emerging Markets is expected to under-perform the Brandes Global. In addition to that, Brandes Emerging is 1.12 times more volatile than Brandes Global Equity. It trades about -0.25 of its total potential returns per unit of risk. Brandes Global Equity is currently generating about 0.08 per unit of volatility. If you would invest 3,083 in Brandes Global Equity on August 26, 2024 and sell it today you would earn a total of 36.00 from holding Brandes Global Equity or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brandes Emerging Markets vs. Brandes Global Equity
Performance |
| Timeline |
| Brandes Emerging Markets |
| Brandes Global Equity |
Brandes Emerging and Brandes Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brandes Emerging and Brandes Global
The main advantage of trading using opposite Brandes Emerging and Brandes Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brandes Emerging 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 Emerging vs. Baron Emerging Markets | Brandes Emerging vs. Brandes International Equity | Brandes Emerging vs. Guggenheim Macro Opportunities | Brandes Emerging vs. Aqr Diversified Arbitrage |
| Brandes Global vs. Brandes Small Cap | Brandes Global vs. Brandes Small Cap | Brandes Global vs. Brandes Small Cap | Brandes Global vs. Brandes E Plus |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |