Correlation Between Bbh Intermediate and Ladenburg Growth

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

Diversification Opportunities for Bbh Intermediate and Ladenburg Growth

0.21

Correlation Coefficient

Bbh Intermediate  Ladenburg Growth

Modest diversification

The 3 months correlation between Bbh and Ladenburg is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bbh Intermediate Municipal and Ladenburg Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladenburg Growth 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 Ladenburg Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladenburg Growth has no effect on the direction of Bbh Intermediate i.e., Bbh Intermediate and Ladenburg Growth go up and down completely randomly.

Pair Corralation between Bbh Intermediate and Ladenburg Growth

Assuming the 90 days horizon Bbh Intermediate Municipal is expected to generate 0.13 times more return on investment than Ladenburg Growth. However, Bbh Intermediate Municipal is 7.92 times less risky than Ladenburg Growth. It trades about 0.04 of its potential returns per unit of risk. Ladenburg Growth is currently generating about -0.14 per unit of risk. If you would invest  1,029  in Bbh Intermediate Municipal on December 2, 2024 and sell it today you would earn a total of  4.00  from holding Bbh Intermediate Municipal or generate 0.39% return on investment over 90 days.

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

Bbh Intermediate Municipal  vs.  Ladenburg Growth

Bbh Intermediate Mun

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bbh Intermediate Municipal are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. 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.

Ladenburg Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ladenburg Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Bbh Intermediate and Ladenburg Growth

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

The idea behind Bbh Intermediate Municipal and Ladenburg Growth 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.