Correlation Between Bbh Intermediate and Strategic Enhanced
Can any of the company-specific risk be diversified away by investing in both Bbh Intermediate and Strategic Enhanced 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 Bbh Intermediate and Strategic Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bbh Intermediate Municipal and Strategic Enhanced Yield, you can compare the effects of market volatilities on Bbh Intermediate and Strategic Enhanced 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 Bbh Intermediate with a short position of Strategic Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bbh Intermediate and Strategic Enhanced.
Diversification Opportunities for Bbh Intermediate and Strategic Enhanced
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bbh and Strategic is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bbh Intermediate Municipal and Strategic Enhanced Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Enhanced Yield and Bbh Intermediate 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 Bbh Intermediate Municipal are associated (or correlated) with Strategic Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Enhanced Yield has no effect on the direction of Bbh Intermediate i.e., Bbh Intermediate and Strategic Enhanced go up and down completely randomly.
Pair Corralation between Bbh Intermediate and Strategic Enhanced
Assuming the 90 days horizon Bbh Intermediate Municipal is expected to generate 0.74 times more return on investment than Strategic Enhanced. However, Bbh Intermediate Municipal is 1.35 times less risky than Strategic Enhanced. It trades about -0.01 of its potential returns per unit of risk. Strategic Enhanced Yield is currently generating about -0.12 per unit of risk. If you would invest 1,034 in Bbh Intermediate Municipal on September 15, 2024 and sell it today you would lose (2.00) from holding Bbh Intermediate Municipal or give up 0.19% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Bbh Intermediate Municipal vs. Strategic Enhanced Yield
Performance |
Timeline |
Bbh Intermediate Mun |
Strategic Enhanced Yield |
Bbh Intermediate and Strategic Enhanced Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bbh Intermediate and Strategic Enhanced
The main advantage of trading using opposite Bbh Intermediate and Strategic Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bbh Intermediate position performs unexpectedly, Strategic Enhanced 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 Strategic Enhanced will offset losses from the drop in Strategic Enhanced's long position.Bbh Intermediate vs. Alger Health Sciences | Bbh Intermediate vs. Blackrock Health Sciences | Bbh Intermediate vs. The Gabelli Healthcare | Bbh Intermediate vs. Delaware Healthcare Fund |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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