Correlation Between CBH and DWS Municipal
Can any of the company-specific risk be diversified away by investing in both CBH and DWS Municipal 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 CBH and DWS Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CBH and DWS Municipal Income, you can compare the effects of market volatilities on CBH and DWS Municipal 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 CBH with a short position of DWS Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBH and DWS Municipal.
Diversification Opportunities for CBH and DWS Municipal
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CBH and DWS is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding CBH and DWS Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DWS Municipal Income and CBH 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 CBH are associated (or correlated) with DWS Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DWS Municipal Income has no effect on the direction of CBH i.e., CBH and DWS Municipal go up and down completely randomly.
Pair Corralation between CBH and DWS Municipal
If you would invest 919.00 in CBH on October 20, 2024 and sell it today you would earn a total of 0.00 from holding CBH or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
CBH vs. DWS Municipal Income
Performance |
| Timeline |
| CBH |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| DWS Municipal Income |
CBH and DWS Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBH and DWS Municipal
The main advantage of trading using opposite CBH and DWS Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBH position performs unexpectedly, DWS Municipal 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 DWS Municipal will offset losses from the drop in DWS Municipal's long position.| CBH vs. Eaton Vance National | CBH vs. Blackrock Muniholdings Ny | CBH vs. Nuveen California Select | CBH vs. MFS Investment Grade |
| DWS Municipal vs. DTF Tax Free | DWS Municipal vs. Blackrock Muniyield Quality | DWS Municipal vs. Blackrock Muni Intermediate | DWS Municipal vs. Blackrock Muniholdings Quality |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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