Correlation Between Brandes International and Brandes Emerging
Can any of the company-specific risk be diversified away by investing in both Brandes International and Brandes Emerging 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 International and Brandes Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brandes International Equity and Brandes Emerging Markets, you can compare the effects of market volatilities on Brandes International and Brandes Emerging 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 International with a short position of Brandes Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brandes International and Brandes Emerging.
Diversification Opportunities for Brandes International and Brandes Emerging
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Brandes and Brandes is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Brandes International Equity and Brandes Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brandes Emerging Markets and Brandes International 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 International Equity are associated (or correlated) with Brandes Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brandes Emerging Markets has no effect on the direction of Brandes International i.e., Brandes International and Brandes Emerging go up and down completely randomly.
Pair Corralation between Brandes International and Brandes Emerging
Assuming the 90 days horizon Brandes International Equity is expected to generate 0.9 times more return on investment than Brandes Emerging. However, Brandes International Equity is 1.11 times less risky than Brandes Emerging. It trades about 0.39 of its potential returns per unit of risk. Brandes Emerging Markets is currently generating about 0.23 per unit of risk. If you would invest 2,093 in Brandes International Equity on November 2, 2024 and sell it today you would earn a total of 119.00 from holding Brandes International Equity or generate 5.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Brandes International Equity vs. Brandes Emerging Markets
Performance |
| Timeline |
| Brandes International |
| Brandes Emerging Markets |
Brandes International and Brandes Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brandes International and Brandes Emerging
The main advantage of trading using opposite Brandes International and Brandes Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brandes International position performs unexpectedly, Brandes Emerging 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 Brandes Emerging will offset losses from the drop in Brandes Emerging's long position.| Brandes International vs. Tcm Small Cap | Brandes International vs. Vanguard Short Term Investment Grade | Brandes International vs. Goldman Sachs Growth | Brandes International vs. Us Small Cap |
| Brandes Emerging vs. Brandes Small Cap | Brandes Emerging vs. Brandes Small Cap | Brandes Emerging vs. Brandes Small Cap | Brandes Emerging vs. Brandes E Plus |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| 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 | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |