Correlation Between BrandywineGLOBAL and Capital Group

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Can any of the company-specific risk be diversified away by investing in both BrandywineGLOBAL and Capital Group 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 Capital Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BrandywineGLOBAL Dynamic and Capital Group International, you can compare the effects of market volatilities on BrandywineGLOBAL and Capital Group 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 Capital Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of BrandywineGLOBAL and Capital Group.

Diversification Opportunities for BrandywineGLOBAL and Capital Group

-0.1
  Correlation Coefficient

Good diversification

The 3 months correlation between BrandywineGLOBAL and Capital is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding BrandywineGLOBAL Dynamic and Capital Group International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Group Intern 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 Capital Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Group Intern has no effect on the direction of BrandywineGLOBAL i.e., BrandywineGLOBAL and Capital Group go up and down completely randomly.

Pair Corralation between BrandywineGLOBAL and Capital Group

Given the investment horizon of 90 days BrandywineGLOBAL Dynamic is expected to generate 0.84 times more return on investment than Capital Group. However, BrandywineGLOBAL Dynamic is 1.19 times less risky than Capital Group. It trades about 0.17 of its potential returns per unit of risk. Capital Group International is currently generating about 0.02 per unit of risk. If you would invest  1,376  in BrandywineGLOBAL Dynamic on September 4, 2024 and sell it today you would earn a total of  121.00  from holding BrandywineGLOBAL Dynamic or generate 8.79% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

BrandywineGLOBAL Dynamic  vs.  Capital Group International

 Performance 
       Timeline  
BrandywineGLOBAL D 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in BrandywineGLOBAL Dynamic are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, BrandywineGLOBAL may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Capital Group Intern 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Capital Group International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Capital Group is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

BrandywineGLOBAL and Capital Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with BrandywineGLOBAL and Capital Group

The main advantage of trading using opposite BrandywineGLOBAL and Capital Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BrandywineGLOBAL position performs unexpectedly, Capital Group 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 Capital Group will offset losses from the drop in Capital Group's long position.
The idea behind BrandywineGLOBAL Dynamic and Capital Group International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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