Correlation Between American Funds and Bbh Intermediate
Can any of the company-specific risk be diversified away by investing in both American Funds and Bbh Intermediate 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 American Funds and Bbh Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds 2010 and Bbh Intermediate Municipal, you can compare the effects of market volatilities on American Funds and Bbh Intermediate 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 American Funds with a short position of Bbh Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Bbh Intermediate.
Diversification Opportunities for American Funds and Bbh Intermediate
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Bbh is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2010 and Bbh Intermediate Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bbh Intermediate Mun and American Funds 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 American Funds 2010 are associated (or correlated) with Bbh Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bbh Intermediate Mun has no effect on the direction of American Funds i.e., American Funds and Bbh Intermediate go up and down completely randomly.
Pair Corralation between American Funds and Bbh Intermediate
Assuming the 90 days horizon American Funds 2010 is expected to generate 2.97 times more return on investment than Bbh Intermediate. However, American Funds is 2.97 times more volatile than Bbh Intermediate Municipal. It trades about 0.08 of its potential returns per unit of risk. Bbh Intermediate Municipal is currently generating about 0.1 per unit of risk. If you would invest 1,000.00 in American Funds 2010 on September 12, 2024 and sell it today you would earn a total of 240.00 from holding American Funds 2010 or generate 24.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds 2010 vs. Bbh Intermediate Municipal
Performance |
| Timeline |
| American Funds 2010 |
| Bbh Intermediate Mun |
American Funds and Bbh Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Bbh Intermediate
The main advantage of trading using opposite American Funds and Bbh Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Bbh Intermediate 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 Bbh Intermediate will offset losses from the drop in Bbh Intermediate's long position.| American Funds vs. Transamerica Cleartrack Retirement | American Funds vs. Deutsche Multi Asset Moderate | American Funds vs. Jpmorgan Smartretirement 2035 | American Funds vs. Fidelity Managed Retirement |
| Bbh Intermediate vs. Tax Exempt Bond | Bbh Intermediate vs. Blackrock National Municipal | Bbh Intermediate vs. SCOR PK | Bbh Intermediate vs. Morningstar Unconstrained Allocation |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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