Correlation Between Scout Small and Brandes International
Can any of the company-specific risk be diversified away by investing in both Scout Small and Brandes International 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 Scout Small and Brandes International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scout Small Cap and Brandes International Equity, you can compare the effects of market volatilities on Scout Small and Brandes International 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 Scout Small with a short position of Brandes International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scout Small and Brandes International.
Diversification Opportunities for Scout Small and Brandes International
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Scout and Brandes is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Scout Small Cap and Brandes International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brandes International and Scout Small 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 Scout Small Cap are associated (or correlated) with Brandes International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brandes International has no effect on the direction of Scout Small i.e., Scout Small and Brandes International go up and down completely randomly.
Pair Corralation between Scout Small and Brandes International
Assuming the 90 days horizon Scout Small Cap is expected to generate 2.06 times more return on investment than Brandes International. However, Scout Small is 2.06 times more volatile than Brandes International Equity. It trades about 0.13 of its potential returns per unit of risk. Brandes International Equity is currently generating about 0.18 per unit of risk. If you would invest 3,326 in Scout Small Cap on September 15, 2024 and sell it today you would earn a total of 93.00 from holding Scout Small Cap or generate 2.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scout Small Cap vs. Brandes International Equity
Performance |
| Timeline |
| Scout Small Cap |
| Brandes International |
Scout Small and Brandes International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scout Small and Brandes International
The main advantage of trading using opposite Scout Small and Brandes International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scout Small position performs unexpectedly, Brandes International 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 International will offset losses from the drop in Brandes International's long position.| Scout Small vs. Calvert Developed Market | Scout Small vs. Ashmore Emerging Markets | Scout Small vs. Shelton Emerging Markets | Scout Small vs. Ab All Market |
| Brandes International vs. Vy Columbia Small | Brandes International vs. Scout Small Cap | Brandes International vs. Champlain Small | Brandes International vs. Sp Smallcap 600 |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |