Correlation Between Blrc Sgy and Bbh Intermediate
Can any of the company-specific risk be diversified away by investing in both Blrc Sgy 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 Blrc Sgy and Bbh Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blrc Sgy Mnp and Bbh Intermediate Municipal, you can compare the effects of market volatilities on Blrc Sgy 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 Blrc Sgy with a short position of Bbh Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blrc Sgy and Bbh Intermediate.
Diversification Opportunities for Blrc Sgy and Bbh Intermediate
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Blrc and Bbh is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Blrc Sgy Mnp 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 Blrc Sgy 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 Blrc Sgy Mnp 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 Blrc Sgy i.e., Blrc Sgy and Bbh Intermediate go up and down completely randomly.
Pair Corralation between Blrc Sgy and Bbh Intermediate
Assuming the 90 days horizon Blrc Sgy Mnp is expected to generate about the same return on investment as Bbh Intermediate Municipal. However, Blrc Sgy is 1.48 times more volatile than Bbh Intermediate Municipal. It trades about 0.02 of its potential returns per unit of risk. Bbh Intermediate Municipal is currently producing about 0.03 per unit of risk. If you would invest 1,020 in Bbh Intermediate Municipal on October 23, 2024 and sell it today you would earn a total of 1.00 from holding Bbh Intermediate Municipal or generate 0.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blrc Sgy Mnp vs. Bbh Intermediate Municipal
Performance |
| Timeline |
| Blrc Sgy Mnp |
| Bbh Intermediate Mun |
Blrc Sgy and Bbh Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blrc Sgy and Bbh Intermediate
The main advantage of trading using opposite Blrc Sgy and Bbh Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blrc Sgy 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.| Blrc Sgy vs. Morningstar Defensive Bond | Blrc Sgy vs. Western Asset Municipal | Blrc Sgy vs. Intermediate Term Bond Fund | Blrc Sgy vs. Multisector Bond Sma |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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