Correlation Between Baird Aggregate and Baird Short-term
Can any of the company-specific risk be diversified away by investing in both Baird Aggregate and Baird Short-term 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 Short-term 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 Short Term Bond, you can compare the effects of market volatilities on Baird Aggregate and Baird Short-term 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 Short-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Aggregate and Baird Short-term.
Diversification Opportunities for Baird Aggregate and Baird Short-term
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BAIRD and Baird is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Baird Aggregate Bond and Baird Short Term Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Short Term 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 Short-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Short Term has no effect on the direction of Baird Aggregate i.e., Baird Aggregate and Baird Short-term go up and down completely randomly.
Pair Corralation between Baird Aggregate and Baird Short-term
Assuming the 90 days horizon Baird Aggregate is expected to generate 1.17 times less return on investment than Baird Short-term. In addition to that, Baird Aggregate is 2.94 times more volatile than Baird Short Term Bond. It trades about 0.04 of its total potential returns per unit of risk. Baird Short Term Bond is currently generating about 0.13 per unit of volatility. If you would invest 864.00 in Baird Short Term Bond on August 29, 2024 and sell it today you would earn a total of 83.00 from holding Baird Short Term Bond or generate 9.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baird Aggregate Bond vs. Baird Short Term Bond
Performance |
| Timeline |
| Baird Aggregate Bond |
| Baird Short Term |
Baird Aggregate and Baird Short-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Aggregate and Baird Short-term
The main advantage of trading using opposite Baird Aggregate and Baird Short-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Aggregate position performs unexpectedly, Baird Short-term 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 Short-term will offset losses from the drop in Baird Short-term's long position.| Baird Aggregate vs. Vanguard Total Bond | Baird Aggregate vs. Vanguard Total Bond | Baird Aggregate vs. Vanguard Total Bond | Baird Aggregate vs. Bond Fund Of |
| Baird Short-term vs. Baird Aggregate Bond | Baird Short-term vs. Baird E Plus | Baird Short-term vs. Baird Short Term Bond | Baird Short-term vs. Baird Ultra Short |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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