Correlation Between Baird Aggregate and Baird Core
Can any of the company-specific risk be diversified away by investing in both Baird Aggregate and Baird Core 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 Core 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 E Plus, you can compare the effects of market volatilities on Baird Aggregate and Baird Core 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 Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Aggregate and Baird Core.
Diversification Opportunities for Baird Aggregate and Baird Core
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Baird and Baird is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Baird Aggregate Bond and Baird E Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird E Plus 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 Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird E Plus has no effect on the direction of Baird Aggregate i.e., Baird Aggregate and Baird Core go up and down completely randomly.
Pair Corralation between Baird Aggregate and Baird Core
Assuming the 90 days horizon Baird Aggregate is expected to generate 1.3 times less return on investment than Baird Core. In addition to that, Baird Aggregate is 1.06 times more volatile than Baird E Plus. It trades about 0.03 of its total potential returns per unit of risk. Baird E Plus is currently generating about 0.04 per unit of volatility. If you would invest 957.00 in Baird E Plus on August 26, 2024 and sell it today you would earn a total of 54.00 from holding Baird E Plus or generate 5.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baird Aggregate Bond vs. Baird E Plus
Performance |
| Timeline |
| Baird Aggregate Bond |
| Baird E Plus |
Baird Aggregate and Baird Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Aggregate and Baird Core
The main advantage of trading using opposite Baird Aggregate and Baird Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Aggregate position performs unexpectedly, Baird Core 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 Core will offset losses from the drop in Baird Core's long position.| Baird Aggregate vs. Pear Tree Polaris | Baird Aggregate vs. Tcw E Fixed | Baird Aggregate vs. Pax High Yield | Baird Aggregate vs. Wasatch E Growth |
| Baird Core vs. Metropolitan West Total | Baird Core vs. Western Asset E | Baird Core vs. John Hancock Disciplined | Baird Core vs. American Beacon Bridgeway |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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