Correlation Between Brandes International and Baron Emerging
Can any of the company-specific risk be diversified away by investing in both Brandes International and Baron 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 Baron 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 Baron Emerging Markets, you can compare the effects of market volatilities on Brandes International and Baron 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 Baron Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brandes International and Baron Emerging.
Diversification Opportunities for Brandes International and Baron Emerging
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Brandes and BARON is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Brandes International Equity and Baron Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron 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 Baron Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Emerging Markets has no effect on the direction of Brandes International i.e., Brandes International and Baron Emerging go up and down completely randomly.
Pair Corralation between Brandes International and Baron Emerging
Assuming the 90 days horizon Brandes International Equity is expected to generate 0.83 times more return on investment than Baron Emerging. However, Brandes International Equity is 1.2 times less risky than Baron Emerging. It trades about 0.08 of its potential returns per unit of risk. Baron Emerging Markets is currently generating about 0.05 per unit of risk. If you would invest 1,735 in Brandes International Equity on August 30, 2024 and sell it today you would earn a total of 423.00 from holding Brandes International Equity or generate 24.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brandes International Equity vs. Baron Emerging Markets
Performance |
| Timeline |
| Brandes International |
| Baron Emerging Markets |
Brandes International and Baron Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brandes International and Baron Emerging
The main advantage of trading using opposite Brandes International and Baron Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brandes International position performs unexpectedly, Baron 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 Baron Emerging will offset losses from the drop in Baron 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 |
| Baron Emerging vs. Eaton Vance Income | Baron Emerging vs. Baird Aggregate Bond | Baron Emerging vs. Champlain Small | Baron Emerging vs. Mfs 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |