Correlation Between Baird Strategic and Hartford Municipal
Can any of the company-specific risk be diversified away by investing in both Baird Strategic and Hartford 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 Hartford 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 The Hartford Municipal, you can compare the effects of market volatilities on Baird Strategic and Hartford 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 Hartford Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Strategic and Hartford Municipal.
Diversification Opportunities for Baird Strategic and Hartford Municipal
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Baird and Hartford is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Baird Strategic Municipal and The Hartford Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford 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 Hartford Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hartford Municipal has no effect on the direction of Baird Strategic i.e., Baird Strategic and Hartford Municipal go up and down completely randomly.
Pair Corralation between Baird Strategic and Hartford Municipal
Assuming the 90 days horizon Baird Strategic is expected to generate 1.1 times less return on investment than Hartford Municipal. But when comparing it to its historical volatility, Baird Strategic Municipal is 1.16 times less risky than Hartford Municipal. It trades about 0.19 of its potential returns per unit of risk. The Hartford Municipal is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 834.00 in The Hartford Municipal on September 1, 2024 and sell it today you would earn a total of 8.00 from holding The Hartford Municipal or generate 0.96% 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. The Hartford Municipal
Performance |
| Timeline |
| Baird Strategic Municipal |
| The Hartford Municipal |
Baird Strategic and Hartford Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Strategic and Hartford Municipal
The main advantage of trading using opposite Baird Strategic and Hartford Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Strategic position performs unexpectedly, Hartford 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 Hartford Municipal will offset losses from the drop in Hartford Municipal's long position.| Baird Strategic vs. Forum Real Estate | Baird Strategic vs. Pender Real Estate | Baird Strategic vs. Prudential Real Estate | Baird Strategic vs. Simt Real Estate |
| Hartford Municipal vs. Great West Real Estate | Hartford Municipal vs. Deutsche Real Estate | Hartford Municipal vs. Msif Real Estate | Hartford Municipal vs. Simt Real Estate |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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