Correlation Between Baird Strategic and The Hartford
Can any of the company-specific risk be diversified away by investing in both Baird Strategic and The Hartford 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 The Hartford 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 The Hartford 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 The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Strategic and The Hartford.
Diversification Opportunities for Baird Strategic and The Hartford
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baird and The is 0.88. 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 The Hartford. 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 The Hartford go up and down completely randomly.
Pair Corralation between Baird Strategic and The Hartford
Assuming the 90 days horizon Baird Strategic Municipal is expected to generate 0.79 times more return on investment than The Hartford. However, Baird Strategic Municipal is 1.27 times less risky than The Hartford. It trades about 0.12 of its potential returns per unit of risk. The Hartford Municipal is currently generating about 0.09 per unit of risk. If you would invest 944.00 in Baird Strategic Municipal on August 30, 2024 and sell it today you would earn a total of 89.00 from holding Baird Strategic Municipal or generate 9.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | 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 The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Strategic and The Hartford
The main advantage of trading using opposite Baird Strategic and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Strategic position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Baird Strategic vs. Kinetics Small Cap | Baird Strategic vs. The Hartford Small | Baird Strategic vs. Ab Small Cap | Baird Strategic vs. Gmo Small Cap |
| The Hartford vs. Vanguard Intermediate Term Tax Exempt | The Hartford vs. Vanguard Intermediate Term Tax Exempt | The Hartford vs. Tax Exempt Bond | The Hartford vs. Tax Exempt Bond |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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