Correlation Between Bbh Intermediate and Federated Strategic
Can any of the company-specific risk be diversified away by investing in both Bbh Intermediate and Federated Strategic 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 Strategic 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 Strategic Income, you can compare the effects of market volatilities on Bbh Intermediate and Federated Strategic 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 Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bbh Intermediate and Federated Strategic.
Diversification Opportunities for Bbh Intermediate and Federated Strategic
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bbh and Federated is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Bbh Intermediate Municipal and Federated Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic 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 Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Strategic has no effect on the direction of Bbh Intermediate i.e., Bbh Intermediate and Federated Strategic go up and down completely randomly.
Pair Corralation between Bbh Intermediate and Federated Strategic
Assuming the 90 days horizon Bbh Intermediate Municipal is expected to generate 0.66 times more return on investment than Federated Strategic. However, Bbh Intermediate Municipal is 1.51 times less risky than Federated Strategic. It trades about 0.41 of its potential returns per unit of risk. Federated Strategic Income is currently generating about 0.2 per unit of risk. If you would invest 1,026 in Bbh Intermediate Municipal on September 13, 2024 and sell it today you would earn a total of 12.00 from holding Bbh Intermediate Municipal or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bbh Intermediate Municipal vs. Federated Strategic Income
Performance |
| Timeline |
| Bbh Intermediate Mun |
| Federated Strategic |
Bbh Intermediate and Federated Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bbh Intermediate and Federated Strategic
The main advantage of trading using opposite Bbh Intermediate and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bbh Intermediate position performs unexpectedly, Federated Strategic 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 Strategic will offset losses from the drop in Federated Strategic's long position.| Bbh Intermediate vs. Bbh Limited Duration | Bbh Intermediate vs. Bbh Limited Duration | Bbh Intermediate vs. Bbh Partner Fund | Bbh Intermediate vs. Bbh Intermediate Municipal |
| Federated Strategic vs. Morningstar Aggressive Growth | Federated Strategic vs. Pace High Yield | Federated Strategic vs. Artisan High Income | Federated Strategic vs. Siit High Yield |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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