Correlation Between Baird Aggregate and Baird Midcap
Can any of the company-specific risk be diversified away by investing in both Baird Aggregate and Baird Midcap 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 Baird Aggregate and Baird Midcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baird Aggregate Bond and Baird Midcap Fund, you can compare the effects of market volatilities on Baird Aggregate and Baird Midcap 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 Baird Aggregate with a short position of Baird Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Aggregate and Baird Midcap.
Diversification Opportunities for Baird Aggregate and Baird Midcap
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BAIRD and Baird is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Baird Aggregate Bond and Baird Midcap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Midcap and Baird Aggregate 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 Baird Aggregate Bond are associated (or correlated) with Baird Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Midcap has no effect on the direction of Baird Aggregate i.e., Baird Aggregate and Baird Midcap go up and down completely randomly.
Pair Corralation between Baird Aggregate and Baird Midcap
Assuming the 90 days horizon Baird Aggregate is expected to generate 9.37 times less return on investment than Baird Midcap. But when comparing it to its historical volatility, Baird Aggregate Bond is 2.74 times less risky than Baird Midcap. It trades about 0.08 of its potential returns per unit of risk. Baird Midcap Fund is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,250 in Baird Midcap Fund on August 29, 2024 and sell it today you would earn a total of 139.00 from holding Baird Midcap Fund or generate 6.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Baird Aggregate Bond vs. Baird Midcap Fund
Performance |
| Timeline |
| Baird Aggregate Bond |
| Baird Midcap |
Baird Aggregate and Baird Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Aggregate and Baird Midcap
The main advantage of trading using opposite Baird Aggregate and Baird Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Aggregate position performs unexpectedly, Baird Midcap 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 Baird Midcap will offset losses from the drop in Baird Midcap's long position.| Baird Aggregate vs. Vanguard Total Bond | Baird Aggregate vs. Vanguard Total Bond | Baird Aggregate vs. Vanguard Total Bond | Baird Aggregate vs. Vanguard Total Bond |
| Baird Midcap vs. Alger Health Sciences | Baird Midcap vs. The Gabelli Healthcare | Baird Midcap vs. Baillie Gifford Health | Baird Midcap vs. Eventide Healthcare Life |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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