Correlation Between Baird Small/mid and Inflation Protection
Can any of the company-specific risk be diversified away by investing in both Baird Small/mid and Inflation Protection 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 Inflation Protection 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 Inflation Protection Fund, you can compare the effects of market volatilities on Baird Small/mid and Inflation Protection 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 Inflation Protection. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Small/mid and Inflation Protection.
Diversification Opportunities for Baird Small/mid and Inflation Protection
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Baird and Inflation is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Baird Smallmid Cap and Inflation Protection Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflation Protection 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 Inflation Protection. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflation Protection has no effect on the direction of Baird Small/mid i.e., Baird Small/mid and Inflation Protection go up and down completely randomly.
Pair Corralation between Baird Small/mid and Inflation Protection
Assuming the 90 days horizon Baird Smallmid Cap is expected to generate 4.57 times more return on investment than Inflation Protection. However, Baird Small/mid is 4.57 times more volatile than Inflation Protection Fund. It trades about 0.39 of its potential returns per unit of risk. Inflation Protection Fund is currently generating about 0.18 per unit of risk. If you would invest 1,628 in Baird Smallmid Cap on September 2, 2024 and sell it today you would earn a total of 171.00 from holding Baird Smallmid Cap or generate 10.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baird Smallmid Cap vs. Inflation Protection Fund
Performance |
| Timeline |
| Baird Smallmid Cap |
| Inflation Protection |
Baird Small/mid and Inflation Protection Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Small/mid and Inflation Protection
The main advantage of trading using opposite Baird Small/mid and Inflation Protection positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Small/mid position performs unexpectedly, Inflation Protection 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 Inflation Protection will offset losses from the drop in Inflation Protection's long position.| Baird Small/mid vs. T Rowe Price | Baird Small/mid vs. Dws Government Money | Baird Small/mid vs. T Rowe Price | Baird Small/mid vs. Franklin Government Money |
| Inflation Protection vs. Siit High Yield | Inflation Protection vs. Metropolitan West High | Inflation Protection vs. Ab Global Risk | Inflation Protection vs. Franklin High 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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