Correlation Between Lsv Us and Bbh Select
Can any of the company-specific risk be diversified away by investing in both Lsv Us and Bbh Select 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 Lsv Us and Bbh Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lsv Managed Volatility and Bbh Select Series, you can compare the effects of market volatilities on Lsv Us and Bbh Select 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 Lsv Us with a short position of Bbh Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lsv Us and Bbh Select.
Diversification Opportunities for Lsv Us and Bbh Select
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lsv and Bbh is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Lsv Managed Volatility and Bbh Select Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bbh Select Series and Lsv Us 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 Lsv Managed Volatility are associated (or correlated) with Bbh Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bbh Select Series has no effect on the direction of Lsv Us i.e., Lsv Us and Bbh Select go up and down completely randomly.
Pair Corralation between Lsv Us and Bbh Select
Assuming the 90 days horizon Lsv Us is expected to generate 1.18 times less return on investment than Bbh Select. But when comparing it to its historical volatility, Lsv Managed Volatility is 1.56 times less risky than Bbh Select. It trades about 0.28 of its potential returns per unit of risk. Bbh Select Series is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,231 in Bbh Select Series on August 30, 2024 and sell it today you would earn a total of 63.00 from holding Bbh Select Series or generate 5.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lsv Managed Volatility vs. Bbh Select Series
Performance |
| Timeline |
| Lsv Managed Volatility |
| Bbh Select Series |
Lsv Us and Bbh Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lsv Us and Bbh Select
The main advantage of trading using opposite Lsv Us and Bbh Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lsv Us position performs unexpectedly, Bbh Select 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 Select will offset losses from the drop in Bbh Select's long position.| Lsv Us vs. Edgar Lomax Value | Lsv Us vs. Aqr Large Cap | Lsv Us vs. Cohen Steers Mlp | Lsv Us vs. Amg River Road |
| Bbh Select vs. Bbh Limited Duration | Bbh Select vs. Bbh Limited Duration | Bbh Select vs. Bbh Partner Fund | Bbh Select vs. Bbh Intermediate Municipal |
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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