Correlation Between Georgia Tax-free and Bbh Intermediate
Can any of the company-specific risk be diversified away by investing in both Georgia Tax-free 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 Georgia Tax-free and Bbh Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Georgia Tax Free Bond and Bbh Intermediate Municipal, you can compare the effects of market volatilities on Georgia Tax-free 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 Georgia Tax-free with a short position of Bbh Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Georgia Tax-free and Bbh Intermediate.
Diversification Opportunities for Georgia Tax-free and Bbh Intermediate
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Georgia and Bbh is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Georgia Tax Free Bond 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 Georgia Tax-free 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 Georgia Tax Free Bond 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 Georgia Tax-free i.e., Georgia Tax-free and Bbh Intermediate go up and down completely randomly.
Pair Corralation between Georgia Tax-free and Bbh Intermediate
Assuming the 90 days horizon Georgia Tax Free Bond is expected to under-perform the Bbh Intermediate. In addition to that, Georgia Tax-free is 1.47 times more volatile than Bbh Intermediate Municipal. It trades about -0.41 of its total potential returns per unit of risk. Bbh Intermediate Municipal is currently generating about -0.4 per unit of volatility. If you would invest 1,039 in Bbh Intermediate Municipal on October 10, 2024 and sell it today you would lose (17.00) from holding Bbh Intermediate Municipal or give up 1.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Georgia Tax Free Bond vs. Bbh Intermediate Municipal
Performance |
| Timeline |
| Georgia Tax Free |
| Bbh Intermediate Mun |
Georgia Tax-free and Bbh Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Georgia Tax-free and Bbh Intermediate
The main advantage of trading using opposite Georgia Tax-free and Bbh Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Georgia Tax-free 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.| Georgia Tax-free vs. Edward Jones Money | Georgia Tax-free vs. Cref Money Market | Georgia Tax-free vs. Schwab Government Money | Georgia Tax-free vs. Thrivent Money Market |
| Bbh Intermediate vs. Goldman Sachs Short | Bbh Intermediate vs. Gabelli Gold Fund | Bbh Intermediate vs. Europac Gold Fund | Bbh Intermediate vs. Deutsche Gold Precious |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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