Correlation Between Baird Municipal and Ab Value
Can any of the company-specific risk be diversified away by investing in both Baird Municipal and Ab Value 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 Ab Value 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 Ab Value Fund, you can compare the effects of market volatilities on Baird Municipal and Ab Value 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 Ab Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Municipal and Ab Value.
Diversification Opportunities for Baird Municipal and Ab Value
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Baird and ABVCX is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Baird Municipal Bond and Ab Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Value Fund 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 Ab Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Value Fund has no effect on the direction of Baird Municipal i.e., Baird Municipal and Ab Value go up and down completely randomly.
Pair Corralation between Baird Municipal and Ab Value
Assuming the 90 days horizon Baird Municipal is expected to generate 3.86 times less return on investment than Ab Value. But when comparing it to its historical volatility, Baird Municipal Bond is 3.79 times less risky than Ab Value. It trades about 0.15 of its potential returns per unit of risk. Ab Value Fund is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,803 in Ab Value Fund on September 5, 2024 and sell it today you would earn a total of 264.00 from holding Ab Value Fund or generate 14.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Baird Municipal Bond vs. Ab Value Fund
Performance |
| Timeline |
| Baird Municipal Bond |
| Ab Value Fund |
Baird Municipal and Ab Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Municipal and Ab Value
The main advantage of trading using opposite Baird Municipal and Ab Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Municipal position performs unexpectedly, Ab Value 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 Ab Value will offset losses from the drop in Ab Value's long position.| Baird Municipal vs. Baird Aggregate Bond | Baird Municipal vs. Baird Aggregate Bond | Baird Municipal vs. Baird Short Term Bond | Baird Municipal vs. Baird Short Term Bond |
| Ab Value vs. Massmutual Select Diversified | Ab Value vs. Calamos Market Neutral | Ab Value vs. Ep Emerging Markets | Ab Value vs. Western Assets Emerging |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |