Correlation Between Brandes Emerging and Growth Allocation
Can any of the company-specific risk be diversified away by investing in both Brandes Emerging and Growth Allocation 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 Growth Allocation 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 Growth Allocation Fund, you can compare the effects of market volatilities on Brandes Emerging and Growth Allocation 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 Growth Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brandes Emerging and Growth Allocation.
Diversification Opportunities for Brandes Emerging and Growth Allocation
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Brandes and Growth is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Brandes Emerging Markets and Growth Allocation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Allocation 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 Growth Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Allocation has no effect on the direction of Brandes Emerging i.e., Brandes Emerging and Growth Allocation go up and down completely randomly.
Pair Corralation between Brandes Emerging and Growth Allocation
Assuming the 90 days horizon Brandes Emerging Markets is expected to generate 1.21 times more return on investment than Growth Allocation. However, Brandes Emerging is 1.21 times more volatile than Growth Allocation Fund. It trades about 0.06 of its potential returns per unit of risk. Growth Allocation Fund is currently generating about -0.03 per unit of risk. If you would invest 845.00 in Brandes Emerging Markets on October 30, 2024 and sell it today you would earn a total of 13.00 from holding Brandes Emerging Markets or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.44% |
| Values | Daily Returns |
Brandes Emerging Markets vs. Growth Allocation Fund
Performance |
| Timeline |
| Brandes Emerging Markets |
| Growth Allocation |
Brandes Emerging and Growth Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brandes Emerging and Growth Allocation
The main advantage of trading using opposite Brandes Emerging and Growth Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brandes Emerging position performs unexpectedly, Growth Allocation 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 Growth Allocation will offset losses from the drop in Growth Allocation'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 |
| Growth Allocation vs. Absolute Convertible Arbitrage | Growth Allocation vs. Fidelity Sai Convertible | Growth Allocation vs. Calamos Dynamic Convertible | Growth Allocation vs. Advent Claymore 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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