Correlation Between Bbh Intermediate and New Economy
Can any of the company-specific risk be diversified away by investing in both Bbh Intermediate and New Economy 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 New Economy 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 New Economy Fund, you can compare the effects of market volatilities on Bbh Intermediate and New Economy 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 New Economy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bbh Intermediate and New Economy.
Diversification Opportunities for Bbh Intermediate and New Economy
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bbh and New is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Bbh Intermediate Municipal and New Economy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Economy Fund 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 New Economy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Economy Fund has no effect on the direction of Bbh Intermediate i.e., Bbh Intermediate and New Economy go up and down completely randomly.
Pair Corralation between Bbh Intermediate and New Economy
Assuming the 90 days horizon Bbh Intermediate is expected to generate 13.93 times less return on investment than New Economy. But when comparing it to its historical volatility, Bbh Intermediate Municipal is 5.22 times less risky than New Economy. It trades about 0.03 of its potential returns per unit of risk. New Economy Fund is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5,049 in New Economy Fund on October 23, 2024 and sell it today you would earn a total of 68.00 from holding New Economy Fund or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bbh Intermediate Municipal vs. New Economy Fund
Performance |
| Timeline |
| Bbh Intermediate Mun |
| New Economy Fund |
Bbh Intermediate and New Economy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bbh Intermediate and New Economy
The main advantage of trading using opposite Bbh Intermediate and New Economy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bbh Intermediate position performs unexpectedly, New Economy 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 New Economy will offset losses from the drop in New Economy's long position.| Bbh Intermediate vs. Goldman Sachs Technology | Bbh Intermediate vs. Vanguard Information Technology | Bbh Intermediate vs. Pgim Jennison Technology | Bbh Intermediate vs. Towpath Technology |
| New Economy vs. Maryland Tax Free Bond | New Economy vs. T Rowe Price | New Economy vs. Gmo High Yield | New Economy vs. Bbh Intermediate Municipal |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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