Correlation Between Bbh Intermediate and International Stock
Can any of the company-specific risk be diversified away by investing in both Bbh Intermediate and International Stock 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 International Stock 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 International Stock Fund, you can compare the effects of market volatilities on Bbh Intermediate and International Stock 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 International Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bbh Intermediate and International Stock.
Diversification Opportunities for Bbh Intermediate and International Stock
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bbh and International is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bbh Intermediate Municipal and International Stock Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Stock 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 International Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Stock has no effect on the direction of Bbh Intermediate i.e., Bbh Intermediate and International Stock go up and down completely randomly.
Pair Corralation between Bbh Intermediate and International Stock
Assuming the 90 days horizon Bbh Intermediate Municipal is expected to generate 0.24 times more return on investment than International Stock. However, Bbh Intermediate Municipal is 4.13 times less risky than International Stock. It trades about 0.02 of its potential returns per unit of risk. International Stock Fund is currently generating about -0.09 per unit of risk. If you would invest 1,018 in Bbh Intermediate Municipal on October 24, 2024 and sell it today you would earn a total of 3.00 from holding Bbh Intermediate Municipal or generate 0.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.33% |
Values | Daily Returns |
Bbh Intermediate Municipal vs. International Stock Fund
Performance |
Timeline |
Bbh Intermediate Mun |
International Stock |
Bbh Intermediate and International Stock Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bbh Intermediate and International Stock
The main advantage of trading using opposite Bbh Intermediate and International Stock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bbh Intermediate position performs unexpectedly, International Stock 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 International Stock will offset losses from the drop in International Stock's long position.Bbh Intermediate vs. Enhanced Fixed Income | ||
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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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