Correlation Between Bbh Intermediate and Us Government
Can any of the company-specific risk be diversified away by investing in both Bbh Intermediate and Us Government 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 Us Government 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 Us Government Securities, you can compare the effects of market volatilities on Bbh Intermediate and Us Government 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 Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bbh Intermediate and Us Government.
Diversification Opportunities for Bbh Intermediate and Us Government
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bbh and RGVCX is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Bbh Intermediate Municipal and Us Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Securities 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 Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Securities has no effect on the direction of Bbh Intermediate i.e., Bbh Intermediate and Us Government go up and down completely randomly.
Pair Corralation between Bbh Intermediate and Us Government
Assuming the 90 days horizon Bbh Intermediate Municipal is expected to generate 0.65 times more return on investment than Us Government. However, Bbh Intermediate Municipal is 1.55 times less risky than Us Government. It trades about 0.04 of its potential returns per unit of risk. Us Government Securities is currently generating about -0.01 per unit of risk. If you would invest 1,024 in Bbh Intermediate Municipal on December 4, 2024 and sell it today you would earn a total of 10.00 from holding Bbh Intermediate Municipal or generate 0.98% 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. Us Government Securities
Performance |
| Timeline |
| Bbh Intermediate Mun |
| Us Government Securities |
Bbh Intermediate and Us Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bbh Intermediate and Us Government
The main advantage of trading using opposite Bbh Intermediate and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bbh Intermediate position performs unexpectedly, Us Government 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 Us Government will offset losses from the drop in Us Government's long position.| Bbh Intermediate vs. Lord Abbett Diversified | Bbh Intermediate vs. Aqr Diversified Arbitrage | Bbh Intermediate vs. Fidelity Advisor Diversified | Bbh Intermediate vs. Western Asset Diversified |
| Us Government vs. Barings Active Short | Us Government vs. Touchstone Ultra Short | Us Government vs. Versatile Bond Portfolio | Us Government vs. Flexible Bond Portfolio |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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