Correlation Between Bridge Builder and International Stock
Can any of the company-specific risk be diversified away by investing in both Bridge Builder 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 Bridge Builder and International Stock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridge Builder E and International Stock Fund, you can compare the effects of market volatilities on Bridge Builder 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 Bridge Builder with a short position of International Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridge Builder and International Stock.
Diversification Opportunities for Bridge Builder and International Stock
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bridge and International is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Bridge Builder E and International Stock Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Stock and Bridge Builder 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 Bridge Builder E 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 Bridge Builder i.e., Bridge Builder and International Stock go up and down completely randomly.
Pair Corralation between Bridge Builder and International Stock
Assuming the 90 days horizon Bridge Builder E is expected to generate 0.39 times more return on investment than International Stock. However, Bridge Builder E is 2.54 times less risky than International Stock. It trades about 0.1 of its potential returns per unit of risk. International Stock Fund is currently generating about -0.18 per unit of risk. If you would invest 876.00 in Bridge Builder E on August 30, 2024 and sell it today you would earn a total of 7.00 from holding Bridge Builder E or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bridge Builder E vs. International Stock Fund
Performance |
| Timeline |
| Bridge Builder E |
| International Stock |
Bridge Builder and International Stock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridge Builder and International Stock
The main advantage of trading using opposite Bridge Builder and International Stock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridge Builder 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.| Bridge Builder vs. Oklahoma College Savings | Bridge Builder vs. The Hartford Inflation | Bridge Builder vs. Lord Abbett Inflation | Bridge Builder vs. Goldman Sachs Inflation |
| International Stock vs. Dreyfus High Yield | International Stock vs. Dreyfusthe Boston Pany | International Stock vs. Dreyfus International Bond | International Stock vs. Dreyfus International Bond |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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