Correlation Between Baird Strategic and Baird Municipal
Can any of the company-specific risk be diversified away by investing in both Baird Strategic and Baird Municipal 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 Baird Municipal 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 Baird Municipal Bond, you can compare the effects of market volatilities on Baird Strategic and Baird Municipal 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 Baird Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Strategic and Baird Municipal.
Diversification Opportunities for Baird Strategic and Baird Municipal
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Baird and Baird is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Baird Strategic Municipal and Baird Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Municipal Bond 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 Baird Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Municipal Bond has no effect on the direction of Baird Strategic i.e., Baird Strategic and Baird Municipal go up and down completely randomly.
Pair Corralation between Baird Strategic and Baird Municipal
Assuming the 90 days horizon Baird Strategic Municipal is expected to generate about the same return on investment as Baird Municipal Bond. But, Baird Strategic Municipal is 1.35 times less risky than Baird Municipal. It trades about 0.12 of its potential returns per unit of risk. Baird Municipal Bond is currently generating about 0.09 per unit of risk. If you would invest 919.00 in Baird Municipal Bond on September 3, 2024 and sell it today you would earn a total of 86.00 from holding Baird Municipal Bond or generate 9.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baird Strategic Municipal vs. Baird Municipal Bond
Performance |
| Timeline |
| Baird Strategic Municipal |
| Baird Municipal Bond |
Baird Strategic and Baird Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Strategic and Baird Municipal
The main advantage of trading using opposite Baird Strategic and Baird Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Strategic position performs unexpectedly, Baird Municipal 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 Baird Municipal will offset losses from the drop in Baird Municipal's long position.| Baird Strategic vs. Fundamental Large Cap | Baird Strategic vs. American Mutual Fund | Baird Strategic vs. Dana Large Cap | Baird Strategic vs. Jhancock Disciplined Value |
| Baird Municipal vs. Qs Global Equity | Baird Municipal vs. Fm Investments Large | Baird Municipal vs. T Rowe Price | Baird Municipal vs. Nationwide Global Equity |
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.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |