Correlation Between Baird Midcap and California High
Can any of the company-specific risk be diversified away by investing in both Baird Midcap and California High 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 Midcap and California High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baird Midcap Fund and California High Yield Municipal, you can compare the effects of market volatilities on Baird Midcap and California High 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 Midcap with a short position of California High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Midcap and California High.
Diversification Opportunities for Baird Midcap and California High
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Baird and California is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Baird Midcap Fund and California High Yield Municipa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California High Yield and Baird Midcap 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 Midcap Fund are associated (or correlated) with California High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California High Yield has no effect on the direction of Baird Midcap i.e., Baird Midcap and California High go up and down completely randomly.
Pair Corralation between Baird Midcap and California High
Assuming the 90 days horizon Baird Midcap is expected to generate 1.45 times less return on investment than California High. In addition to that, Baird Midcap is 3.37 times more volatile than California High Yield Municipal. It trades about 0.02 of its total potential returns per unit of risk. California High Yield Municipal is currently generating about 0.08 per unit of volatility. If you would invest 917.00 in California High Yield Municipal on September 12, 2024 and sell it today you would earn a total of 79.00 from holding California High Yield Municipal or generate 8.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baird Midcap Fund vs. California High Yield Municipa
Performance |
| Timeline |
| Baird Midcap |
| California High Yield |
Baird Midcap and California High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Midcap and California High
The main advantage of trading using opposite Baird Midcap and California High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Midcap position performs unexpectedly, California High 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 California High will offset losses from the drop in California High's long position.| Baird Midcap vs. California High Yield Municipal | Baird Midcap vs. Counterpoint Tactical Municipal | Baird Midcap vs. Bbh Intermediate Municipal | Baird Midcap vs. Ab Impact Municipal |
| California High vs. T Rowe Price | California High vs. Bbh Intermediate Municipal | California High vs. Ab Bond Inflation | California High vs. Blrc Sgy Mnp |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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