Correlation Between Baird Strategic and High Yield
Can any of the company-specific risk be diversified away by investing in both Baird Strategic and High Yield 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 High Yield 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 High Yield Municipal Fund, you can compare the effects of market volatilities on Baird Strategic and High Yield 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 High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Strategic and High Yield.
Diversification Opportunities for Baird Strategic and High Yield
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Baird and High is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Baird Strategic Municipal and High Yield Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Municipal 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 High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Municipal has no effect on the direction of Baird Strategic i.e., Baird Strategic and High Yield go up and down completely randomly.
Pair Corralation between Baird Strategic and High Yield
Assuming the 90 days horizon Baird Strategic Municipal is expected to generate about the same return on investment as High Yield Municipal Fund. But, Baird Strategic Municipal is 1.69 times less risky than High Yield. It trades about 0.7 of its potential returns per unit of risk. High Yield Municipal Fund is currently generating about 0.42 per unit of risk. If you would invest 892.00 in High Yield Municipal Fund on September 13, 2024 and sell it today you would earn a total of 10.00 from holding High Yield Municipal Fund or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Baird Strategic Municipal vs. High Yield Municipal Fund
Performance |
| Timeline |
| Baird Strategic Municipal |
| High Yield Municipal |
Baird Strategic and High Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Strategic and High Yield
The main advantage of trading using opposite Baird Strategic and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Strategic position performs unexpectedly, High Yield 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 High Yield will offset losses from the drop in High Yield's long position.| Baird Strategic vs. Short Precious Metals | Baird Strategic vs. James Balanced Golden | Baird Strategic vs. Oppenheimer Gold Special | Baird Strategic vs. Goldman Sachs Clean |
| High Yield vs. Old Westbury Municipal | High Yield vs. Transamerica Intermediate Muni | High Yield vs. Morningstar Municipal Bond | High Yield vs. Baird Strategic Municipal |
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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