Correlation Between BrandywineGLOBAL and Dow Jones
Can any of the company-specific risk be diversified away by investing in both BrandywineGLOBAL and Dow Jones 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 BrandywineGLOBAL and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BrandywineGLOBAL Dynamic and Dow Jones Industrial, you can compare the effects of market volatilities on BrandywineGLOBAL and Dow Jones 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 BrandywineGLOBAL with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of BrandywineGLOBAL and Dow Jones.
Diversification Opportunities for BrandywineGLOBAL and Dow Jones
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BrandywineGLOBAL and Dow is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding BrandywineGLOBAL Dynamic and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and BrandywineGLOBAL 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 BrandywineGLOBAL Dynamic are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of BrandywineGLOBAL i.e., BrandywineGLOBAL and Dow Jones go up and down completely randomly.
Pair Corralation between BrandywineGLOBAL and Dow Jones
Given the investment horizon of 90 days BrandywineGLOBAL is expected to generate 1.01 times less return on investment than Dow Jones. In addition to that, BrandywineGLOBAL is 1.11 times more volatile than Dow Jones Industrial. It trades about 0.1 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of volatility. If you would invest 3,383,361 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 1,107,704 from holding Dow Jones Industrial or generate 32.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BrandywineGLOBAL Dynamic vs. Dow Jones Industrial
Performance |
| Timeline |
BrandywineGLOBAL and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
BrandywineGLOBAL Dynamic
Pair trading matchups for BrandywineGLOBAL
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with BrandywineGLOBAL and Dow Jones
The main advantage of trading using opposite BrandywineGLOBAL and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BrandywineGLOBAL position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| BrandywineGLOBAL vs. iShares Core SP | BrandywineGLOBAL vs. iShares Core MSCI | BrandywineGLOBAL vs. iShares Broad USD | BrandywineGLOBAL vs. iShares Core SP |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |