Correlation Between Baron Emerging and Brandes Emerging
Can any of the company-specific risk be diversified away by investing in both Baron Emerging 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 Baron Emerging and Brandes Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Emerging Markets and Brandes Emerging Markets, you can compare the effects of market volatilities on Baron Emerging 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 Baron Emerging with a short position of Brandes Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Emerging and Brandes Emerging.
Diversification Opportunities for Baron Emerging and Brandes Emerging
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Baron and BRANDES is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Baron Emerging Markets 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 Baron Emerging 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 Baron Emerging Markets 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 Baron Emerging i.e., Baron Emerging and Brandes Emerging go up and down completely randomly.
Pair Corralation between Baron Emerging and Brandes Emerging
Assuming the 90 days horizon Baron Emerging Markets is expected to generate 1.12 times more return on investment than Brandes Emerging. However, Baron Emerging is 1.12 times more volatile than Brandes Emerging Markets. It trades about -0.17 of its potential returns per unit of risk. Brandes Emerging Markets is currently generating about -0.31 per unit of risk. If you would invest 1,585 in Baron Emerging Markets on September 6, 2024 and sell it today you would lose (48.00) from holding Baron Emerging Markets or give up 3.03% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 95.45% |
Values | Daily Returns |
Baron Emerging Markets vs. Brandes Emerging Markets
Performance |
Timeline |
Baron Emerging Markets |
Brandes Emerging Markets |
Baron Emerging and Brandes Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Baron Emerging and Brandes Emerging
The main advantage of trading using opposite Baron Emerging and Brandes Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Emerging 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.Baron Emerging vs. Eaton Vance Income | Baron Emerging vs. Baird Aggregate Bond | Baron Emerging vs. Champlain Small | Baron Emerging vs. Mfs Emerging Markets |
Brandes Emerging vs. Baron Emerging Markets | Brandes Emerging vs. Brandes International Small | Brandes Emerging vs. Brandes International Equity | Brandes Emerging vs. Guggenheim Macro Opportunities |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
Stocks Directory Find actively traded stocks across global markets | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Equity Valuation Check real value of public entities based on technical and fundamental data |