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
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brandes and Brandes is 0.59. 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 is expected to generate 1.18 times less return on investment than Brandes Global. In addition to that, Brandes Emerging is 1.15 times more volatile than Brandes Global Equity. It trades about 0.06 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 2,327 in Brandes Global Equity on August 30, 2024 and sell it today you would earn a total of 817.00 from holding Brandes Global Equity or generate 35.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| 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 Small | Brandes Emerging vs. Brandes International Equity | Brandes Emerging vs. Guggenheim Macro Opportunities |
| Brandes Global vs. Fidelity Sai Convertible | Brandes Global vs. Virtus Convertible | Brandes Global vs. Lord Abbett Convertible | Brandes Global vs. Calamos Dynamic Convertible |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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