Correlation Between Bbh Intermediate and American High-income
Can any of the company-specific risk be diversified away by investing in both Bbh Intermediate and American High-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 Bbh Intermediate and American High-income 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 American High Income Municipal, you can compare the effects of market volatilities on Bbh Intermediate and American High-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 Bbh Intermediate with a short position of American High-income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bbh Intermediate and American High-income.
Diversification Opportunities for Bbh Intermediate and American High-income
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bbh and American is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Bbh Intermediate Municipal and American High Income Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American High Income 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 American High-income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American High Income has no effect on the direction of Bbh Intermediate i.e., Bbh Intermediate and American High-income go up and down completely randomly.
Pair Corralation between Bbh Intermediate and American High-income
Assuming the 90 days horizon Bbh Intermediate Municipal is expected to generate 0.73 times more return on investment than American High-income. However, Bbh Intermediate Municipal is 1.37 times less risky than American High-income. It trades about -0.34 of its potential returns per unit of risk. American High Income Municipal is currently generating about -0.34 per unit of risk. If you would invest 1,035 in Bbh Intermediate Municipal on October 13, 2024 and sell it today you would lose (13.00) from holding Bbh Intermediate Municipal or give up 1.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bbh Intermediate Municipal vs. American High Income Municipal
Performance |
| Timeline |
| Bbh Intermediate Mun |
| American High Income |
Bbh Intermediate and American High-income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bbh Intermediate and American High-income
The main advantage of trading using opposite Bbh Intermediate and American High-income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bbh Intermediate position performs unexpectedly, American High-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 American High-income will offset losses from the drop in American High-income's long position.| Bbh Intermediate vs. Touchstone Large Cap | Bbh Intermediate vs. Pace Large Growth | Bbh Intermediate vs. Tax Managed Large Cap | Bbh Intermediate vs. Aqr Large Cap |
| American High-income vs. Bbh Intermediate Municipal | American High-income vs. Rbc Ultra Short Fixed | American High-income vs. Barings High Yield | American High-income vs. Alliancebernstein 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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