Correlation Between Baird Midcap and Energy Fund
Can any of the company-specific risk be diversified away by investing in both Baird Midcap and Energy Fund 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 Energy Fund 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 Energy Fund Class, you can compare the effects of market volatilities on Baird Midcap and Energy Fund 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 Energy Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Midcap and Energy Fund.
Diversification Opportunities for Baird Midcap and Energy Fund
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baird and Energy is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Baird Midcap Fund and Energy Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Fund Class 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 Energy Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Fund Class has no effect on the direction of Baird Midcap i.e., Baird Midcap and Energy Fund go up and down completely randomly.
Pair Corralation between Baird Midcap and Energy Fund
Assuming the 90 days horizon Baird Midcap Fund is expected to under-perform the Energy Fund. In addition to that, Baird Midcap is 1.05 times more volatile than Energy Fund Class. It trades about -0.34 of its total potential returns per unit of risk. Energy Fund Class is currently generating about 0.03 per unit of volatility. If you would invest 23,425 in Energy Fund Class on October 11, 2024 and sell it today you would earn a total of 116.00 from holding Energy Fund Class or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Baird Midcap Fund vs. Energy Fund Class
Performance |
| Timeline |
| Baird Midcap |
| Energy Fund Class |
Baird Midcap and Energy Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Midcap and Energy Fund
The main advantage of trading using opposite Baird Midcap and Energy Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Midcap position performs unexpectedly, Energy Fund 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 Energy Fund will offset losses from the drop in Energy Fund's long position.| Baird Midcap vs. Dws Government Money | Baird Midcap vs. Dreyfus Government Cash | Baird Midcap vs. Davis Government Bond | Baird Midcap vs. Inverse Government Long |
| Energy Fund vs. Gabelli Gold Fund | Energy Fund vs. Gold And Precious | Energy Fund vs. The Gold Bullion | Energy Fund vs. Deutsche Gold Precious |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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