Correlation Between Baird Strategic and Moderate Duration
Can any of the company-specific risk be diversified away by investing in both Baird Strategic and Moderate Duration 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 Moderate Duration 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 Moderate Duration Fund, you can compare the effects of market volatilities on Baird Strategic and Moderate Duration 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 Moderate Duration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Strategic and Moderate Duration.
Diversification Opportunities for Baird Strategic and Moderate Duration
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baird and Moderate is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Baird Strategic Municipal and Moderate Duration Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderate Duration 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 Moderate Duration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderate Duration has no effect on the direction of Baird Strategic i.e., Baird Strategic and Moderate Duration go up and down completely randomly.
Pair Corralation between Baird Strategic and Moderate Duration
Assuming the 90 days horizon Baird Strategic Municipal is expected to generate 0.7 times more return on investment than Moderate Duration. However, Baird Strategic Municipal is 1.44 times less risky than Moderate Duration. It trades about 0.2 of its potential returns per unit of risk. Moderate Duration Fund is currently generating about 0.13 per unit of risk. If you would invest 999.00 in Baird Strategic Municipal on September 1, 2024 and sell it today you would earn a total of 36.00 from holding Baird Strategic Municipal or generate 3.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baird Strategic Municipal vs. Moderate Duration Fund
Performance |
| Timeline |
| Baird Strategic Municipal |
| Moderate Duration |
Baird Strategic and Moderate Duration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Strategic and Moderate Duration
The main advantage of trading using opposite Baird Strategic and Moderate Duration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Strategic position performs unexpectedly, Moderate Duration 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 Moderate Duration will offset losses from the drop in Moderate Duration'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 |
| Moderate Duration vs. Pimco Rae Worldwide | Moderate Duration vs. Pimco Rae Worldwide | Moderate Duration vs. Pimco Rae Worldwide | Moderate Duration vs. Pimco Rae Worldwide |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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