Correlation Between Vanguard Total and Brandes Emerging
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Brandes 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 Vanguard Total and Brandes Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total International and Brandes Emerging Markets, you can compare the effects of market volatilities on Vanguard Total and Brandes 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 Vanguard Total with a short position of Brandes Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Brandes Emerging.
Diversification Opportunities for Vanguard Total and Brandes Emerging
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Brandes is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total International and Brandes Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brandes Emerging Markets and Vanguard Total 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 Vanguard Total International are associated (or correlated) with Brandes Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brandes Emerging Markets has no effect on the direction of Vanguard Total i.e., Vanguard Total and Brandes Emerging go up and down completely randomly.
Pair Corralation between Vanguard Total and Brandes Emerging
Assuming the 90 days horizon Vanguard Total International is expected to generate 0.96 times more return on investment than Brandes Emerging. However, Vanguard Total International is 1.04 times less risky than Brandes Emerging. It trades about -0.16 of its potential returns per unit of risk. Brandes Emerging Markets is currently generating about -0.28 per unit of risk. If you would invest 13,453 in Vanguard Total International on August 30, 2024 and sell it today you would lose (345.00) from holding Vanguard Total International or give up 2.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total International vs. Brandes Emerging Markets
Performance |
| Timeline |
| Vanguard Total Inter |
| Brandes Emerging Markets |
Vanguard Total and Brandes Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Brandes Emerging
The main advantage of trading using opposite Vanguard Total and Brandes Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Brandes 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 Brandes Emerging will offset losses from the drop in Brandes Emerging's long position.| Vanguard Total vs. California Bond Fund | Vanguard Total vs. Kinetics Market Opportunities | Vanguard Total vs. Multisector Bond Sma | Vanguard Total vs. Artisan Emerging Markets |
| Brandes Emerging vs. Qs Small Capitalization | Brandes Emerging vs. Small Midcap Dividend Income | Brandes Emerging vs. Small Pany Growth | Brandes Emerging vs. Ancorathelen Small Mid 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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