Correlation Between Financial Industries and Bbh Intermediate
Can any of the company-specific risk be diversified away by investing in both Financial Industries 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 Financial Industries and Bbh Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financial Industries Fund and Bbh Intermediate Municipal, you can compare the effects of market volatilities on Financial Industries 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 Financial Industries with a short position of Bbh Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial Industries and Bbh Intermediate.
Diversification Opportunities for Financial Industries and Bbh Intermediate
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Financial and Bbh is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Financial Industries Fund 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 Financial Industries 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 Financial Industries Fund 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 Financial Industries i.e., Financial Industries and Bbh Intermediate go up and down completely randomly.
Pair Corralation between Financial Industries and Bbh Intermediate
Assuming the 90 days horizon Financial Industries Fund is expected to generate 6.1 times more return on investment than Bbh Intermediate. However, Financial Industries is 6.1 times more volatile than Bbh Intermediate Municipal. It trades about 0.07 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 1,475 in Financial Industries Fund on September 3, 2024 and sell it today you would earn a total of 653.00 from holding Financial Industries Fund or generate 44.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Financial Industries Fund vs. Bbh Intermediate Municipal
Performance |
| Timeline |
| Financial Industries |
| Bbh Intermediate Mun |
Financial Industries and Bbh Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financial Industries and Bbh Intermediate
The main advantage of trading using opposite Financial Industries and Bbh Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial Industries 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.| Financial Industries vs. Qs Growth Fund | Financial Industries vs. Smallcap Growth Fund | Financial Industries vs. Eip Growth And | Financial Industries vs. Pace Large Growth |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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