Correlation Between Federated Pennsylvania and Bbh Intermediate
Can any of the company-specific risk be diversified away by investing in both Federated Pennsylvania 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 Federated Pennsylvania and Bbh Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Pennsylvania Municipal and Bbh Intermediate Municipal, you can compare the effects of market volatilities on Federated Pennsylvania 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 Federated Pennsylvania with a short position of Bbh Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Pennsylvania and Bbh Intermediate.
Diversification Opportunities for Federated Pennsylvania and Bbh Intermediate
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between FEDERATED and BBH is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Federated Pennsylvania Municip 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 Federated Pennsylvania 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 Federated Pennsylvania Municipal 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 Federated Pennsylvania i.e., Federated Pennsylvania and Bbh Intermediate go up and down completely randomly.
Pair Corralation between Federated Pennsylvania and Bbh Intermediate
Assuming the 90 days horizon Federated Pennsylvania Municipal is expected to generate 1.17 times more return on investment than Bbh Intermediate. However, Federated Pennsylvania is 1.17 times more volatile than Bbh Intermediate Municipal. It trades about 0.2 of its potential returns per unit of risk. Bbh Intermediate Municipal is currently generating about 0.15 per unit of risk. If you would invest 1,004 in Federated Pennsylvania Municipal on September 4, 2024 and sell it today you would earn a total of 12.00 from holding Federated Pennsylvania Municipal or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Pennsylvania Municip vs. Bbh Intermediate Municipal
Performance |
| Timeline |
| Federated Pennsylvania |
| Bbh Intermediate Mun |
Federated Pennsylvania and Bbh Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Pennsylvania and Bbh Intermediate
The main advantage of trading using opposite Federated Pennsylvania and Bbh Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Pennsylvania 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.| Federated Pennsylvania vs. Federated Emerging Market | Federated Pennsylvania vs. Federated Mdt All | Federated Pennsylvania vs. Federated Mdt Balanced | Federated Pennsylvania vs. Federated Global Allocation |
| Bbh Intermediate vs. Bbh Limited Duration | Bbh Intermediate vs. Bbh Limited Duration | Bbh Intermediate vs. Bbh Partner Fund | Bbh Intermediate 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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