Correlation Between Baird Municipal and Baird E
Can any of the company-specific risk be diversified away by investing in both Baird Municipal and Baird E 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 Municipal and Baird E into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baird Municipal Bond and Baird E Plus, you can compare the effects of market volatilities on Baird Municipal and Baird E 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 Municipal with a short position of Baird E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Municipal and Baird E.
Diversification Opportunities for Baird Municipal and Baird E
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baird and Baird is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Baird Municipal Bond and Baird E Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird E Plus and Baird Municipal 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 Municipal Bond are associated (or correlated) with Baird E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird E Plus has no effect on the direction of Baird Municipal i.e., Baird Municipal and Baird E go up and down completely randomly.
Pair Corralation between Baird Municipal and Baird E
Assuming the 90 days horizon Baird Municipal is expected to generate 1.01 times less return on investment than Baird E. But when comparing it to its historical volatility, Baird Municipal Bond is 1.69 times less risky than Baird E. It trades about 0.18 of its potential returns per unit of risk. Baird E Plus is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 911.00 in Baird E Plus on August 29, 2024 and sell it today you would earn a total of 107.00 from holding Baird E Plus or generate 11.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baird Municipal Bond vs. Baird E Plus
Performance |
| Timeline |
| Baird Municipal Bond |
| Baird E Plus |
Baird Municipal and Baird E Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Municipal and Baird E
The main advantage of trading using opposite Baird Municipal and Baird E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Municipal position performs unexpectedly, Baird E 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 E will offset losses from the drop in Baird E's long position.| Baird Municipal vs. Bbh Intermediate Municipal | Baird Municipal vs. Multisector Bond Sma | Baird Municipal vs. Transamerica Emerging Markets | Baird Municipal vs. Vanguard Emerging Markets |
| Baird E vs. Pimco Income Fund | Baird E vs. HUMANA INC | Baird E vs. Aquagold International | Baird E vs. Barloworld Ltd ADR |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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