Correlation Between Baird Core and Baird Aggregate
Can any of the company-specific risk be diversified away by investing in both Baird Core and Baird Aggregate 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 Baird Aggregate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baird E Intermediate and Baird Aggregate Bond, you can compare the effects of market volatilities on Baird Core and Baird Aggregate 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 Baird Aggregate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Core and Baird Aggregate.
Diversification Opportunities for Baird Core and Baird Aggregate
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baird and Baird is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Baird E Intermediate and Baird Aggregate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Aggregate Bond 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 Intermediate are associated (or correlated) with Baird Aggregate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Aggregate Bond has no effect on the direction of Baird Core i.e., Baird Core and Baird Aggregate go up and down completely randomly.
Pair Corralation between Baird Core and Baird Aggregate
Assuming the 90 days horizon Baird Core is expected to generate 1.37 times less return on investment than Baird Aggregate. But when comparing it to its historical volatility, Baird E Intermediate is 2.52 times less risky than Baird Aggregate. It trades about 0.13 of its potential returns per unit of risk. Baird Aggregate Bond is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 918.00 in Baird Aggregate Bond on August 26, 2024 and sell it today you would earn a total of 58.00 from holding Baird Aggregate Bond or generate 6.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baird E Intermediate vs. Baird Aggregate Bond
Performance |
| Timeline |
| Baird E Intermediate |
| Baird Aggregate Bond |
Baird Core and Baird Aggregate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Core and Baird Aggregate
The main advantage of trading using opposite Baird Core and Baird Aggregate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Core position performs unexpectedly, Baird Aggregate 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 Aggregate will offset losses from the drop in Baird Aggregate's long position.| Baird Core vs. Baird Aggregate Bond | Baird Core vs. Baird Aggregate Bond | Baird Core vs. Baird Short Term Bond | Baird Core vs. Baird Short Term Bond |
| Baird Aggregate vs. Metropolitan West Total | Baird Aggregate vs. Mfs Emerging Markets | Baird Aggregate vs. Jpmorgan E Bond | Baird Aggregate vs. Eaton Vance Income |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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