Correlation Between Baird Strategic and First Investors
Can any of the company-specific risk be diversified away by investing in both Baird Strategic and First Investors 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 First Investors 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 First Investors Growth, you can compare the effects of market volatilities on Baird Strategic and First Investors 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 First Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Strategic and First Investors.
Diversification Opportunities for Baird Strategic and First Investors
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Baird and First is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Baird Strategic Municipal and First Investors Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Investors Growth 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 First Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Investors Growth has no effect on the direction of Baird Strategic i.e., Baird Strategic and First Investors go up and down completely randomly.
Pair Corralation between Baird Strategic and First Investors
Assuming the 90 days horizon Baird Strategic Municipal is expected to generate 0.19 times more return on investment than First Investors. However, Baird Strategic Municipal is 5.22 times less risky than First Investors. It trades about 0.36 of its potential returns per unit of risk. First Investors Growth is currently generating about -0.13 per unit of risk. If you would invest 1,026 in Baird Strategic Municipal on September 14, 2024 and sell it today you would earn a total of 8.00 from holding Baird Strategic Municipal or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baird Strategic Municipal vs. First Investors Growth
Performance |
| Timeline |
| Baird Strategic Municipal |
| First Investors Growth |
Baird Strategic and First Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Strategic and First Investors
The main advantage of trading using opposite Baird Strategic and First Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Strategic position performs unexpectedly, First Investors 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 First Investors will offset losses from the drop in First Investors' long position.| Baird Strategic vs. Qs Growth Fund | Baird Strategic vs. Semiconductor Ultrasector Profund | Baird Strategic vs. Balanced Fund Investor | Baird Strategic vs. Rbc Funds Trust |
| First Investors vs. Transamerica Intermediate Muni | First Investors vs. T Rowe Price | First Investors vs. Baird Strategic Municipal | First Investors vs. Counterpoint Tactical 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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