Correlation Between Boston Partners and Brandes Global
Can any of the company-specific risk be diversified away by investing in both Boston Partners and Brandes Global 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 Boston Partners and Brandes Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Partners Small and Brandes Global Equity, you can compare the effects of market volatilities on Boston Partners and Brandes Global 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 Boston Partners with a short position of Brandes Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Partners and Brandes Global.
Diversification Opportunities for Boston Partners and Brandes Global
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boston and Brandes is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Boston Partners Small and Brandes Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brandes Global Equity and Boston Partners 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 Boston Partners Small are associated (or correlated) with Brandes Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brandes Global Equity has no effect on the direction of Boston Partners i.e., Boston Partners and Brandes Global go up and down completely randomly.
Pair Corralation between Boston Partners and Brandes Global
Assuming the 90 days horizon Boston Partners is expected to generate 1.19 times less return on investment than Brandes Global. In addition to that, Boston Partners is 1.72 times more volatile than Brandes Global Equity. It trades about 0.05 of its total potential returns per unit of risk. Brandes Global Equity is currently generating about 0.1 per unit of volatility. If you would invest 2,500 in Brandes Global Equity on September 2, 2024 and sell it today you would earn a total of 688.00 from holding Brandes Global Equity or generate 27.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Partners Small vs. Brandes Global Equity
Performance |
| Timeline |
| Boston Partners Small |
| Brandes Global Equity |
Boston Partners and Brandes Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Partners and Brandes Global
The main advantage of trading using opposite Boston Partners and Brandes Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Partners position performs unexpectedly, Brandes Global 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 Global will offset losses from the drop in Brandes Global's long position.| Boston Partners vs. Aggressive Investors 1 | Boston Partners vs. Buffalo Small Cap | Boston Partners vs. Rice Hall James | Boston Partners vs. Putnam Small Cap |
| Brandes Global vs. Brandes Small Cap | Brandes Global vs. Brandes Small Cap | Brandes Global vs. Brandes Small Cap | Brandes Global 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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