Correlation Between Baird Small/mid and Payden Core
Can any of the company-specific risk be diversified away by investing in both Baird Small/mid and Payden Core 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 Payden Core 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 Payden Core Bond, you can compare the effects of market volatilities on Baird Small/mid and Payden Core 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 Payden Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Small/mid and Payden Core.
Diversification Opportunities for Baird Small/mid and Payden Core
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Baird and Payden is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Baird Smallmid Cap and Payden Core Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Core Bond 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 Payden Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Core Bond has no effect on the direction of Baird Small/mid i.e., Baird Small/mid and Payden Core go up and down completely randomly.
Pair Corralation between Baird Small/mid and Payden Core
Assuming the 90 days horizon Baird Smallmid Cap is expected to generate 3.21 times more return on investment than Payden Core. However, Baird Small/mid is 3.21 times more volatile than Payden Core Bond. It trades about 0.08 of its potential returns per unit of risk. Payden Core Bond is currently generating about 0.09 per unit of risk. If you would invest 1,567 in Baird Smallmid Cap on September 4, 2024 and sell it today you would earn a total of 232.00 from holding Baird Smallmid Cap or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
Baird Smallmid Cap vs. Payden Core Bond
Performance |
| Timeline |
| Baird Smallmid Cap |
| Payden Core Bond |
Baird Small/mid and Payden Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Small/mid and Payden Core
The main advantage of trading using opposite Baird Small/mid and Payden Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Small/mid position performs unexpectedly, Payden Core 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 Payden Core will offset losses from the drop in Payden Core's long position.| Baird Small/mid vs. Artisan High Income | Baird Small/mid vs. Bbh Intermediate Municipal | Baird Small/mid vs. Maryland Tax Free Bond | Baird Small/mid vs. Ab Bond Inflation |
| Payden Core vs. Payden Porate Bond | Payden Core vs. Payden Absolute Return | Payden Core vs. Payden Absolute Return | Payden Core vs. Payden Emerging Markets |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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