Correlation Between Bbh Intermediate and The Hartford

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

Diversification Opportunities for Bbh Intermediate and The Hartford

0.77

Correlation Coefficient

Bbh Intermediate  The Hartford

Poor diversification

The 3 months correlation between Bbh and The is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bbh Intermediate Municipal and The Hartford High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford High 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 The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford High has no effect on the direction of Bbh Intermediate i.e., Bbh Intermediate and The Hartford go up and down completely randomly.

Pair Corralation between Bbh Intermediate and The Hartford

Assuming the 90 days horizon Bbh Intermediate is expected to generate 24.0 times less return on investment than The Hartford. In addition to that, Bbh Intermediate is 1.2 times more volatile than The Hartford High. It trades about 0.0 of its total potential returns per unit of risk. The Hartford High is currently generating about 0.04 per unit of volatility. If you would invest  700.00  in The Hartford High on October 6, 2024 and sell it today you would earn a total of  2.00  from holding The Hartford High or generate 0.29% 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.  The Hartford High

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 basic indicators, Bbh Intermediate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hartford High

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Hartford High has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, The Hartford 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 The Hartford

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

The idea behind Bbh Intermediate Municipal and The Hartford High 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.