Correlation Between Brandes Emerging and Moderately Aggressive
Can any of the company-specific risk be diversified away by investing in both Brandes Emerging and Moderately Aggressive 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 Moderately Aggressive 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 Moderately Aggressive Balanced, you can compare the effects of market volatilities on Brandes Emerging and Moderately Aggressive 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 Moderately Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brandes Emerging and Moderately Aggressive.
Diversification Opportunities for Brandes Emerging and Moderately Aggressive
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Brandes and Moderately is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Brandes Emerging Markets and Moderately Aggressive Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderately Aggressive 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 Moderately Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderately Aggressive has no effect on the direction of Brandes Emerging i.e., Brandes Emerging and Moderately Aggressive go up and down completely randomly.
Pair Corralation between Brandes Emerging and Moderately Aggressive
Assuming the 90 days horizon Brandes Emerging Markets is expected to generate 1.02 times more return on investment than Moderately Aggressive. However, Brandes Emerging is 1.02 times more volatile than Moderately Aggressive Balanced. It trades about 0.06 of its potential returns per unit of risk. Moderately Aggressive Balanced is currently generating about -0.09 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. Moderately Aggressive Balanced
Performance |
| Timeline |
| Brandes Emerging Markets |
| Moderately Aggressive |
Brandes Emerging and Moderately Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brandes Emerging and Moderately Aggressive
The main advantage of trading using opposite Brandes Emerging and Moderately Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brandes Emerging position performs unexpectedly, Moderately Aggressive 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 Moderately Aggressive will offset losses from the drop in Moderately Aggressive'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 |
| Moderately Aggressive vs. Victory Rs Partners | Moderately Aggressive vs. Heartland Value Plus | Moderately Aggressive vs. Vanguard Small Cap Value | Moderately Aggressive vs. William Blair Small |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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