Correlation Between Bbh Partner and Ab Value

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

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

Diversification Opportunities for Bbh Partner and Ab Value

0.36

Correlation Coefficient

Bbh Partner  Ab Value

Weak diversification

The 3 months correlation between Bbh and ABVCX is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bbh Partner Fund and Ab Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Value Fund and Bbh Partner 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 Partner Fund are associated (or correlated) with Ab Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Value Fund has no effect on the direction of Bbh Partner i.e., Bbh Partner and Ab Value go up and down completely randomly.

Pair Corralation between Bbh Partner and Ab Value

Assuming the 90 days horizon Bbh Partner Fund is expected to generate 1.15 times more return on investment than Ab Value. However, Bbh Partner is 1.15 times more volatile than Ab Value Fund. It trades about 0.15 of its potential returns per unit of risk. Ab Value Fund is currently generating about 0.04 per unit of risk. If you would invest  1,658  in Bbh Partner Fund on December 28, 2024 and sell it today you would earn a total of  144.00  from holding Bbh Partner Fund or generate 8.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Bbh Partner Fund  vs.  Ab Value Fund

Bbh Partner Fund

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bbh Partner Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Bbh Partner may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Ab Value Fund

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Value Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Ab Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bbh Partner and Ab Value

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

The idea behind Bbh Partner Fund and Ab Value 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.