Correlation Between Nasdaq and Bbh Income

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

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

Diversification Opportunities for Nasdaq and Bbh Income

-0.32

Correlation Coefficient

Nasdaq  Bbh Income

Very good diversification

The 3 months correlation between Nasdaq and Bbh is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc 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 Nasdaq 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 Nasdaq Inc 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 Nasdaq i.e., Nasdaq and Bbh Income go up and down completely randomly.

Pair Corralation between Nasdaq and Bbh Income

Given the investment horizon of 90 days Nasdaq Inc is expected to under-perform the Bbh Income. In addition to that, Nasdaq is 4.19 times more volatile than Bbh Income Fund. It trades about -0.17 of its total potential returns per unit of risk. Bbh Income Fund is currently generating about -0.51 per unit of volatility. If you would invest  899.00  in Bbh Income Fund on October 7, 2024 and sell it today you would lose (22.00) from holding Bbh Income Fund or give up 2.45% of portfolio value over 90 days.

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

Nasdaq Inc  vs.  Bbh Income Fund

Nasdaq Inc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 Nasdaq and Bbh Income

The main advantage of trading using opposite Nasdaq and Bbh Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 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 Nasdaq Inc 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.