Correlation Between Baird Small/mid and Cutler Equity
Can any of the company-specific risk be diversified away by investing in both Baird Small/mid and Cutler Equity 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 Small/mid and Cutler Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baird Smallmid Cap and Cutler Equity, you can compare the effects of market volatilities on Baird Small/mid and Cutler Equity 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 Small/mid with a short position of Cutler Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Small/mid and Cutler Equity.
Diversification Opportunities for Baird Small/mid and Cutler Equity
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baird and Cutler is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Baird Smallmid Cap and Cutler Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cutler Equity and Baird Small/mid 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 Smallmid Cap are associated (or correlated) with Cutler Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cutler Equity has no effect on the direction of Baird Small/mid i.e., Baird Small/mid and Cutler Equity go up and down completely randomly.
Pair Corralation between Baird Small/mid and Cutler Equity
Assuming the 90 days horizon Baird Smallmid Cap is expected to generate 1.79 times more return on investment than Cutler Equity. However, Baird Small/mid is 1.79 times more volatile than Cutler Equity. It trades about 0.13 of its potential returns per unit of risk. Cutler Equity is currently generating about 0.16 per unit of risk. If you would invest 1,532 in Baird Smallmid Cap on September 1, 2024 and sell it today you would earn a total of 296.00 from holding Baird Smallmid Cap or generate 19.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baird Smallmid Cap vs. Cutler Equity
Performance |
| Timeline |
| Baird Smallmid Cap |
| Cutler Equity |
Baird Small/mid and Cutler Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Small/mid and Cutler Equity
The main advantage of trading using opposite Baird Small/mid and Cutler Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Small/mid position performs unexpectedly, Cutler Equity 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 Cutler Equity will offset losses from the drop in Cutler Equity's long position.| Baird Small/mid vs. Ab Global Bond | Baird Small/mid vs. Federated Ultrashort Bond | Baird Small/mid vs. Multisector Bond Sma | Baird Small/mid vs. Maryland Tax Free Bond |
| Cutler Equity vs. Fidelity Sai Convertible | Cutler Equity vs. Virtus Convertible | Cutler Equity vs. Putnam Convertible Incm Gwth | Cutler Equity vs. Allianzgi Convertible 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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