Correlation Between Bbh Intermediate and American Beacon
Can any of the company-specific risk be diversified away by investing in both Bbh Intermediate and American Beacon 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 Beacon 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 Beacon Shapiro, you can compare the effects of market volatilities on Bbh Intermediate and American Beacon 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 Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bbh Intermediate and American Beacon.
Diversification Opportunities for Bbh Intermediate and American Beacon
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bbh and American is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Bbh Intermediate Municipal and American Beacon Shapiro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Shapiro 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 Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Shapiro has no effect on the direction of Bbh Intermediate i.e., Bbh Intermediate and American Beacon go up and down completely randomly.
Pair Corralation between Bbh Intermediate and American Beacon
Assuming the 90 days horizon Bbh Intermediate Municipal is expected to generate 0.18 times more return on investment than American Beacon. However, Bbh Intermediate Municipal is 5.58 times less risky than American Beacon. It trades about -0.13 of its potential returns per unit of risk. American Beacon Shapiro is currently generating about -0.09 per unit of risk. If you would invest 1,026 in Bbh Intermediate Municipal on January 11, 2025 and sell it today you would lose (17.00) from holding Bbh Intermediate Municipal or give up 1.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bbh Intermediate Municipal vs. American Beacon Shapiro
Performance |
| Timeline |
| Bbh Intermediate Mun |
| American Beacon Shapiro |
Bbh Intermediate and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bbh Intermediate and American Beacon
The main advantage of trading using opposite Bbh Intermediate and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bbh Intermediate position performs unexpectedly, American Beacon 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 Beacon will offset losses from the drop in American Beacon's long position.| Bbh Intermediate vs. Fuhkbx | Bbh Intermediate vs. Eic Value Fund | Bbh Intermediate vs. Fznopx | Bbh Intermediate vs. Artisan Mid Cap |
| American Beacon vs. Artisan Developing World | American Beacon vs. American Beacon Shapiro | American Beacon vs. Osterweis Emerging Opportunity | American Beacon vs. Jacob Micro Cap |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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