Correlation Between Bbh Intermediate and Federated Porate
Can any of the company-specific risk be diversified away by investing in both Bbh Intermediate and Federated Porate 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 Federated Porate 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 Federated Porate Bond, you can compare the effects of market volatilities on Bbh Intermediate and Federated Porate 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 Federated Porate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bbh Intermediate and Federated Porate.
Diversification Opportunities for Bbh Intermediate and Federated Porate
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bbh and Federated is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bbh Intermediate Municipal and Federated Porate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Porate Bond 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 Federated Porate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Porate Bond has no effect on the direction of Bbh Intermediate i.e., Bbh Intermediate and Federated Porate go up and down completely randomly.
Pair Corralation between Bbh Intermediate and Federated Porate
Assuming the 90 days horizon Bbh Intermediate Municipal is expected to generate 0.34 times more return on investment than Federated Porate. However, Bbh Intermediate Municipal is 2.95 times less risky than Federated Porate. It trades about 0.28 of its potential returns per unit of risk. Federated Porate Bond is currently generating about 0.06 per unit of risk. If you would invest 1,029 in Bbh Intermediate Municipal on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Bbh Intermediate Municipal or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bbh Intermediate Municipal vs. Federated Porate Bond
Performance |
| Timeline |
| Bbh Intermediate Mun |
| Federated Porate Bond |
Bbh Intermediate and Federated Porate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bbh Intermediate and Federated Porate
The main advantage of trading using opposite Bbh Intermediate and Federated Porate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bbh Intermediate position performs unexpectedly, Federated Porate 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 Federated Porate will offset losses from the drop in Federated Porate's long position.| Bbh Intermediate vs. Dreyfus Technology Growth | Bbh Intermediate vs. Red Oak Technology | Bbh Intermediate vs. Biotechnology Ultrasector Profund | Bbh Intermediate vs. Towpath Technology |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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