Correlation Between Western Asset and Bbh Limited
Can any of the company-specific risk be diversified away by investing in both Western Asset and Bbh Limited 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 Western Asset and Bbh Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Municipal and Bbh Limited Duration, you can compare the effects of market volatilities on Western Asset and Bbh Limited 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 Western Asset with a short position of Bbh Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Bbh Limited.
Diversification Opportunities for Western Asset and Bbh Limited
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and BBH is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Municipal and Bbh Limited Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bbh Limited Duration and Western Asset 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 Western Asset Municipal are associated (or correlated) with Bbh Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bbh Limited Duration has no effect on the direction of Western Asset i.e., Western Asset and Bbh Limited go up and down completely randomly.
Pair Corralation between Western Asset and Bbh Limited
Assuming the 90 days horizon Western Asset is expected to generate 36.5 times less return on investment than Bbh Limited. In addition to that, Western Asset is 4.02 times more volatile than Bbh Limited Duration. It trades about 0.0 of its total potential returns per unit of risk. Bbh Limited Duration is currently generating about 0.25 per unit of volatility. If you would invest 1,038 in Bbh Limited Duration on August 29, 2024 and sell it today you would earn a total of 5.00 from holding Bbh Limited Duration or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Municipal vs. Bbh Limited Duration
Performance |
| Timeline |
| Western Asset Municipal |
| Bbh Limited Duration |
Western Asset and Bbh Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Bbh Limited
The main advantage of trading using opposite Western Asset and Bbh Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Bbh Limited 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 Limited will offset losses from the drop in Bbh Limited's long position.| Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard 500 Index | Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard Total Stock |
| Bbh Limited vs. T Rowe Price | Bbh Limited vs. Bbh Limited Duration | Bbh Limited vs. Calamos Global Vertible | Bbh Limited vs. Prudential Floating Rate |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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