Correlation Between Brandes Global and Energy Services
Can any of the company-specific risk be diversified away by investing in both Brandes Global and Energy Services 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 Energy Services 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 Energy Services Fund, you can compare the effects of market volatilities on Brandes Global and Energy Services 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 Energy Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brandes Global and Energy Services.
Diversification Opportunities for Brandes Global and Energy Services
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brandes and Energy is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Brandes Global Equity and Energy Services Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Services 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 Energy Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Services has no effect on the direction of Brandes Global i.e., Brandes Global and Energy Services go up and down completely randomly.
Pair Corralation between Brandes Global and Energy Services
Assuming the 90 days horizon Brandes Global Equity is expected to generate 0.44 times more return on investment than Energy Services. However, Brandes Global Equity is 2.25 times less risky than Energy Services. It trades about 0.18 of its potential returns per unit of risk. Energy Services Fund is currently generating about -0.18 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. Energy Services Fund
Performance |
| Timeline |
| Brandes Global Equity |
| Energy Services |
Brandes Global and Energy Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brandes Global and Energy Services
The main advantage of trading using opposite Brandes Global and Energy Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brandes Global position performs unexpectedly, Energy Services 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 Energy Services will offset losses from the drop in Energy Services' 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 |
| Energy Services vs. Energy Fund Investor | Energy Services vs. Basic Materials Fund | Energy Services vs. Electronics Fund Investor | Energy Services vs. Health Care Fund |
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.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |