Correlation Between Bbh Intermediate and Bbh Income

Can any of the company-specific risk be diversified away by investing in both Bbh Intermediate and Bbh Income 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 Bbh Income 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 Bbh Income Fund, you can compare the effects of market volatilities on Bbh Intermediate and Bbh Income 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 Bbh Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bbh Intermediate and Bbh Income.

Diversification Opportunities for Bbh Intermediate and Bbh Income

0.76

Correlation Coefficient

Bbh Intermediate  Bbh Income

Poor diversification

The 3 months correlation between Bbh and Bbh is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Bbh Intermediate Municipal and Bbh Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bbh Income Fund 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 Bbh Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bbh Income Fund has no effect on the direction of Bbh Intermediate i.e., Bbh Intermediate and Bbh Income go up and down completely randomly.

Pair Corralation between Bbh Intermediate and Bbh Income

Assuming the 90 days horizon Bbh Intermediate is expected to generate 1.51 times less return on investment than Bbh Income. But when comparing it to its historical volatility, Bbh Intermediate Municipal is 2.09 times less risky than Bbh Income. It trades about 0.1 of its potential returns per unit of risk. Bbh Income Fund is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  780.00  in Bbh Income Fund on September 14, 2024 and sell it today you would earn a total of  110.00  from holding Bbh Income Fund or generate 14.1% return on investment over 90 days.

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

Bbh Intermediate Municipal  vs.  Bbh Income Fund

Bbh Intermediate Mun

Risk-Adjusted Performance

0 of 100

Very Weak

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

Bbh Income Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bbh Income Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Bbh Income 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 Intermediate and Bbh Income

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

The idea behind Bbh Intermediate Municipal and Bbh Income 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.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.