Correlation Between Balanced Fund and Brandes Core
Can any of the company-specific risk be diversified away by investing in both Balanced Fund and Brandes Core 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 Balanced Fund and Brandes Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Fund Investor and Brandes E Plus, you can compare the effects of market volatilities on Balanced Fund and Brandes Core 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 Balanced Fund with a short position of Brandes Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and Brandes Core.
Diversification Opportunities for Balanced Fund and Brandes Core
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Balanced and Brandes is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Investor and Brandes E Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brandes E Plus and Balanced Fund 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 Balanced Fund Investor are associated (or correlated) with Brandes Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brandes E Plus has no effect on the direction of Balanced Fund i.e., Balanced Fund and Brandes Core go up and down completely randomly.
Pair Corralation between Balanced Fund and Brandes Core
Assuming the 90 days horizon Balanced Fund Investor is expected to generate 1.83 times more return on investment than Brandes Core. However, Balanced Fund is 1.83 times more volatile than Brandes E Plus. It trades about 0.11 of its potential returns per unit of risk. Brandes E Plus is currently generating about 0.08 per unit of risk. If you would invest 1,872 in Balanced Fund Investor on September 1, 2024 and sell it today you would earn a total of 146.00 from holding Balanced Fund Investor or generate 7.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Balanced Fund Investor vs. Brandes E Plus
Performance |
| Timeline |
| Balanced Fund Investor |
| Brandes E Plus |
Balanced Fund and Brandes Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Fund and Brandes Core
The main advantage of trading using opposite Balanced Fund and Brandes Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Fund position performs unexpectedly, Brandes Core 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 Core will offset losses from the drop in Brandes Core's long position.| Balanced Fund vs. Select Fund Investor | Balanced Fund vs. Heritage Fund Investor | Balanced Fund vs. Value Fund Investor | Balanced Fund vs. Growth Fund Investor |
| Brandes Core vs. Transamerica Large Cap | Brandes Core vs. American Mutual Fund | Brandes Core vs. Fundamental Large Cap | Brandes Core vs. Tax Managed Large Cap |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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