Correlation Between Baird Strategic and Amer Beacon
Can any of the company-specific risk be diversified away by investing in both Baird Strategic and Amer Beacon 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 Strategic and Amer Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baird Strategic Municipal and Amer Beacon Ark, you can compare the effects of market volatilities on Baird Strategic and Amer Beacon 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 Strategic with a short position of Amer Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Strategic and Amer Beacon.
Diversification Opportunities for Baird Strategic and Amer Beacon
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Baird and Amer is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Baird Strategic Municipal and Amer Beacon Ark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Beacon Ark and Baird Strategic 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 Strategic Municipal are associated (or correlated) with Amer Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amer Beacon Ark has no effect on the direction of Baird Strategic i.e., Baird Strategic and Amer Beacon go up and down completely randomly.
Pair Corralation between Baird Strategic and Amer Beacon
Assuming the 90 days horizon Baird Strategic is expected to generate 5.36 times less return on investment than Amer Beacon. But when comparing it to its historical volatility, Baird Strategic Municipal is 14.59 times less risky than Amer Beacon. It trades about 0.13 of its potential returns per unit of risk. Amer Beacon Ark is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,185 in Amer Beacon Ark on September 2, 2024 and sell it today you would earn a total of 409.00 from holding Amer Beacon Ark or generate 34.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baird Strategic Municipal vs. Amer Beacon Ark
Performance |
| Timeline |
| Baird Strategic Municipal |
| Amer Beacon Ark |
Baird Strategic and Amer Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Strategic and Amer Beacon
The main advantage of trading using opposite Baird Strategic and Amer Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Strategic position performs unexpectedly, Amer Beacon 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 Amer Beacon will offset losses from the drop in Amer Beacon's long position.| Baird Strategic vs. Nationwide Inflation Protected Securities | Baird Strategic vs. Oklahoma College Savings | Baird Strategic vs. Aqr Managed Futures | Baird Strategic vs. Ab Bond Inflation |
| Amer Beacon vs. Amer Beacon Ark | Amer Beacon vs. American Beacon Large | Amer Beacon vs. American Beacon Ark | Amer Beacon vs. American Beacon Ark |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |