Correlation Between Baird Core and Amg Southernsun
Can any of the company-specific risk be diversified away by investing in both Baird Core and Amg Southernsun 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 Core and Amg Southernsun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baird E Plus and Amg Southernsun Small, you can compare the effects of market volatilities on Baird Core and Amg Southernsun 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 Core with a short position of Amg Southernsun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Core and Amg Southernsun.
Diversification Opportunities for Baird Core and Amg Southernsun
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Baird and Amg is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Baird E Plus and Amg Southernsun Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Southernsun Small and Baird Core 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 E Plus are associated (or correlated) with Amg Southernsun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Southernsun Small has no effect on the direction of Baird Core i.e., Baird Core and Amg Southernsun go up and down completely randomly.
Pair Corralation between Baird Core and Amg Southernsun
Assuming the 90 days horizon Baird E Plus is expected to generate 0.27 times more return on investment than Amg Southernsun. However, Baird E Plus is 3.64 times less risky than Amg Southernsun. It trades about 0.04 of its potential returns per unit of risk. Amg Southernsun Small is currently generating about 0.01 per unit of risk. If you would invest 980.00 in Baird E Plus on August 26, 2024 and sell it today you would earn a total of 83.00 from holding Baird E Plus or generate 8.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baird E Plus vs. Amg Southernsun Small
Performance |
| Timeline |
| Baird E Plus |
| Amg Southernsun Small |
Baird Core and Amg Southernsun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Core and Amg Southernsun
The main advantage of trading using opposite Baird Core and Amg Southernsun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Core position performs unexpectedly, Amg Southernsun 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 Amg Southernsun will offset losses from the drop in Amg Southernsun's long position.| Baird Core vs. Metropolitan West Total | Baird Core vs. Western Asset E | Baird Core vs. John Hancock Disciplined | Baird Core vs. American Beacon Bridgeway |
| Amg Southernsun vs. American Beacon Bridgeway | Amg Southernsun vs. John Hancock Disciplined | Amg Southernsun vs. Large Cap Fund | Amg Southernsun vs. Baird E Plus |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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