Correlation Between Dws Government and Bbh Intermediate

Can any of the company-specific risk be diversified away by investing in both Dws Government 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 Dws Government and Bbh Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dws Government Money and Bbh Intermediate Municipal, you can compare the effects of market volatilities on Dws Government 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 Dws Government with a short position of Bbh Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dws Government and Bbh Intermediate.

Diversification Opportunities for Dws Government and Bbh Intermediate

0.28

Correlation Coefficient

Dws Government  Bbh Intermediate

Modest diversification

The 3 months correlation between Dws and Bbh is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Dws Government Money 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 Dws Government 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 Dws Government Money 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 Dws Government i.e., Dws Government and Bbh Intermediate go up and down completely randomly.

Pair Corralation between Dws Government and Bbh Intermediate

Assuming the 90 days horizon Dws Government Money is expected to generate 229.04 times more return on investment than Bbh Intermediate. However, Dws Government is 229.04 times more volatile than Bbh Intermediate Municipal. It trades about 0.05 of its potential returns per unit of risk. Bbh Intermediate Municipal is currently generating about 0.06 per unit of risk. If you would invest  30.00  in Dws Government Money on January 25, 2024 and sell it today you would earn a total of  70.00  from holding Dws Government Money or generate 233.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.99%
Values	Daily Returns

Dws Government Money  vs.  Bbh Intermediate Municipal

Dws Government Money

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dws Government Money has generated negative risk-adjusted returns adding no value to fund investors. In spite of conflicting performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the fund investors.

Bbh Intermediate Mun

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bbh Intermediate Municipal are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Bbh Intermediate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dws Government and Bbh Intermediate

The main advantage of trading using opposite Dws Government and Bbh Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dws Government 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.

The idea behind Dws Government Money and Bbh Intermediate Municipal pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.