Correlation Between Baird Core and Baird Short-term
Can any of the company-specific risk be diversified away by investing in both Baird Core and Baird Short-term 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 Short-term 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 Short Term Municipal, you can compare the effects of market volatilities on Baird Core and Baird Short-term 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 Short-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Core and Baird Short-term.
Diversification Opportunities for Baird Core and Baird Short-term
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baird and Baird is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Baird E Intermediate and Baird Short Term Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Short Term 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 Short-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Short Term has no effect on the direction of Baird Core i.e., Baird Core and Baird Short-term go up and down completely randomly.
Pair Corralation between Baird Core and Baird Short-term
Assuming the 90 days horizon Baird E Intermediate is expected to generate 1.59 times more return on investment than Baird Short-term. However, Baird Core is 1.59 times more volatile than Baird Short Term Municipal. It trades about 0.1 of its potential returns per unit of risk. Baird Short Term Municipal is currently generating about 0.15 per unit of risk. If you would invest 955.00 in Baird E Intermediate on August 26, 2024 and sell it today you would earn a total of 77.00 from holding Baird E Intermediate or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baird E Intermediate vs. Baird Short Term Municipal
Performance |
| Timeline |
| Baird E Intermediate |
| Baird Short Term |
Baird Core and Baird Short-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Core and Baird Short-term
The main advantage of trading using opposite Baird Core and Baird Short-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Core position performs unexpectedly, Baird Short-term 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 Short-term will offset losses from the drop in Baird Short-term'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 Short-term vs. Baird Aggregate Bond | Baird Short-term vs. Baird Aggregate Bond | Baird Short-term vs. Baird Short Term Bond | Baird Short-term vs. Baird Short Term Bond |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |