Correlation Between Brandes Global and World Energy
Can any of the company-specific risk be diversified away by investing in both Brandes Global and World Energy 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 Global and World Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brandes Global Equity and World Energy Fund, you can compare the effects of market volatilities on Brandes Global and World Energy 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 Global with a short position of World Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brandes Global and World Energy.
Diversification Opportunities for Brandes Global and World Energy
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brandes and WORLD is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Brandes Global Equity and World Energy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Energy and Brandes Global 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 Global Equity are associated (or correlated) with World Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Energy has no effect on the direction of Brandes Global i.e., Brandes Global and World Energy go up and down completely randomly.
Pair Corralation between Brandes Global and World Energy
Assuming the 90 days horizon Brandes Global Equity is expected to generate 0.52 times more return on investment than World Energy. However, Brandes Global Equity is 1.92 times less risky than World Energy. It trades about 0.18 of its potential returns per unit of risk. World Energy Fund is currently generating about -0.1 per unit of risk. If you would invest 3,069 in Brandes Global Equity on November 28, 2024 and sell it today you would earn a total of 76.00 from holding Brandes Global Equity or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brandes Global Equity vs. World Energy Fund
Performance |
| Timeline |
| Brandes Global Equity |
| World Energy |
Brandes Global and World Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brandes Global and World Energy
The main advantage of trading using opposite Brandes Global and World Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brandes Global position performs unexpectedly, World Energy 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 World Energy will offset losses from the drop in World Energy's long position.| Brandes Global vs. Dodge International Stock | Brandes Global vs. Bbh Partner Fund | Brandes Global vs. Pro Blend Servative Term | Brandes Global vs. Ultra Short Fixed Income |
| World Energy vs. Small Pany Growth | World Energy vs. Champlain Small | World Energy vs. Goldman Sachs Small | World Energy vs. Ashmore Emerging Markets |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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