Correlation Between Brandes Emerging and Locorr Market
Can any of the company-specific risk be diversified away by investing in both Brandes Emerging and Locorr Market 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 Locorr Market 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 Locorr Market Trend, you can compare the effects of market volatilities on Brandes Emerging and Locorr Market 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 Locorr Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brandes Emerging and Locorr Market.
Diversification Opportunities for Brandes Emerging and Locorr Market
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Brandes and Locorr is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Brandes Emerging Markets and Locorr Market Trend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Market Trend 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 Locorr Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Market Trend has no effect on the direction of Brandes Emerging i.e., Brandes Emerging and Locorr Market go up and down completely randomly.
Pair Corralation between Brandes Emerging and Locorr Market
Assuming the 90 days horizon Brandes Emerging Markets is expected to under-perform the Locorr Market. In addition to that, Brandes Emerging is 1.87 times more volatile than Locorr Market Trend. It trades about -0.18 of its total potential returns per unit of risk. Locorr Market Trend is currently generating about 0.06 per unit of volatility. If you would invest 1,038 in Locorr Market Trend on October 17, 2024 and sell it today you would earn a total of 5.00 from holding Locorr Market Trend or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brandes Emerging Markets vs. Locorr Market Trend
Performance |
| Timeline |
| Brandes Emerging Markets |
| Locorr Market Trend |
Brandes Emerging and Locorr Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brandes Emerging and Locorr Market
The main advantage of trading using opposite Brandes Emerging and Locorr Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brandes Emerging position performs unexpectedly, Locorr Market 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 Locorr Market will offset losses from the drop in Locorr Market'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 |
| Locorr Market vs. Aqr Sustainable Long Short | Locorr Market vs. Brandes Emerging Markets | Locorr Market vs. Ashmore Emerging Markets | Locorr Market vs. Lord Abbett Diversified |
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
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Transaction History View history of all your transactions and understand their impact on performance |