Correlation Between Gmo High and Bbh Intermediate
Can any of the company-specific risk be diversified away by investing in both Gmo High 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 Gmo High and Bbh Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo High Yield and Bbh Intermediate Municipal, you can compare the effects of market volatilities on Gmo High 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 Gmo High with a short position of Bbh Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo High and Bbh Intermediate.
Diversification Opportunities for Gmo High and Bbh Intermediate
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GMO and Bbh is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Gmo High Yield 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 Gmo High 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 Gmo High Yield 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 Gmo High i.e., Gmo High and Bbh Intermediate go up and down completely randomly.
Pair Corralation between Gmo High and Bbh Intermediate
Assuming the 90 days horizon Gmo High Yield is expected to generate 1.67 times more return on investment than Bbh Intermediate. However, Gmo High is 1.67 times more volatile than Bbh Intermediate Municipal. It trades about 0.13 of its potential returns per unit of risk. Bbh Intermediate Municipal is currently generating about 0.09 per unit of risk. If you would invest 1,541 in Gmo High Yield on September 3, 2024 and sell it today you would earn a total of 267.00 from holding Gmo High Yield or generate 17.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 83.23% |
| Values | Daily Returns |
Gmo High Yield vs. Bbh Intermediate Municipal
Performance |
| Timeline |
| Gmo High Yield |
| Bbh Intermediate Mun |
Gmo High and Bbh Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo High and Bbh Intermediate
The main advantage of trading using opposite Gmo High and Bbh Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo High 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.| Gmo High vs. Vanguard High Yield Corporate | Gmo High vs. Vanguard High Yield Porate | Gmo High vs. Blackrock Hi Yld | Gmo High vs. Blackrock High Yield |
| Bbh Intermediate vs. Franklin Growth Opportunities | Bbh Intermediate vs. Pace Large Growth | Bbh Intermediate vs. Ftfa Franklin Templeton Growth | Bbh Intermediate vs. Qs Moderate Growth |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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