Correlation Between Baird Small/mid and Nasdaq 100
Can any of the company-specific risk be diversified away by investing in both Baird Small/mid and Nasdaq 100 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 Nasdaq 100 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 Nasdaq 100 Index Fund, you can compare the effects of market volatilities on Baird Small/mid and Nasdaq 100 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 Nasdaq 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Small/mid and Nasdaq 100.
Diversification Opportunities for Baird Small/mid and Nasdaq 100
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baird and Nasdaq is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Baird Smallmid Cap and Nasdaq 100 Index Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 Index 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 Nasdaq 100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 Index has no effect on the direction of Baird Small/mid i.e., Baird Small/mid and Nasdaq 100 go up and down completely randomly.
Pair Corralation between Baird Small/mid and Nasdaq 100
Assuming the 90 days horizon Baird Smallmid Cap is expected to generate 0.8 times more return on investment than Nasdaq 100. However, Baird Smallmid Cap is 1.25 times less risky than Nasdaq 100. It trades about 0.13 of its potential returns per unit of risk. Nasdaq 100 Index Fund is currently generating about 0.03 per unit of risk. If you would invest 1,506 in Baird Smallmid Cap on September 1, 2024 and sell it today you would earn a total of 289.00 from holding Baird Smallmid Cap or generate 19.19% 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. Nasdaq 100 Index Fund
Performance |
| Timeline |
| Baird Smallmid Cap |
| Nasdaq 100 Index |
Baird Small/mid and Nasdaq 100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Small/mid and Nasdaq 100
The main advantage of trading using opposite Baird Small/mid and Nasdaq 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Small/mid position performs unexpectedly, Nasdaq 100 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 Nasdaq 100 will offset losses from the drop in Nasdaq 100's long position.| Baird Small/mid vs. Baird Aggregate Bond | Baird Small/mid vs. Baird Aggregate Bond | Baird Small/mid vs. Baird Short Term Bond | Baird Small/mid vs. Baird Short Term Bond |
| Nasdaq 100 vs. Shelton Emerging Markets | Nasdaq 100 vs. Shelton Emerging Markets | Nasdaq 100 vs. California Tax Free Income | Nasdaq 100 vs. Shelton Funds |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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