Correlation Between Sp 500 and Bbh Partner

Can any of the company-specific risk be diversified away by investing in both Sp 500 and Bbh Partner 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 Sp 500 and Bbh Partner into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sp 500 Equal and Bbh Partner Fund, you can compare the effects of market volatilities on Sp 500 and Bbh Partner 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 Sp 500 with a short position of Bbh Partner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sp 500 and Bbh Partner.

Diversification Opportunities for Sp 500 and Bbh Partner

-0.29

Correlation Coefficient

Sp 500  Bbh Partner

Very good diversification

The 3 months correlation between INDEX and Bbh is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sp 500 Equal and Bbh Partner Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bbh Partner Fund and Sp 500 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 Sp 500 Equal are associated (or correlated) with Bbh Partner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bbh Partner Fund has no effect on the direction of Sp 500 i.e., Sp 500 and Bbh Partner go up and down completely randomly.

Pair Corralation between Sp 500 and Bbh Partner

Assuming the 90 days horizon Sp 500 Equal is expected to generate 7.74 times more return on investment than Bbh Partner. However, Sp 500 is 7.74 times more volatile than Bbh Partner Fund. It trades about 0.2 of its potential returns per unit of risk. Bbh Partner Fund is currently generating about -0.02 per unit of risk. If you would invest  5,273  in Sp 500 Equal on September 2, 2024 and sell it today you would earn a total of  490.00  from holding Sp 500 Equal or generate 9.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Sp 500 Equal  vs.  Bbh Partner Fund

Sp 500 Equal

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sp 500 Equal are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Sp 500 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Bbh Partner Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bbh Partner Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Bbh Partner is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sp 500 and Bbh Partner

The main advantage of trading using opposite Sp 500 and Bbh Partner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sp 500 position performs unexpectedly, Bbh Partner 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 Bbh Partner will offset losses from the drop in Bbh Partner's long position.

The idea behind Sp 500 Equal and Bbh Partner Fund 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..