Correlation Between Baird Strategic and Counterpoint Tactical
Can any of the company-specific risk be diversified away by investing in both Baird Strategic and Counterpoint Tactical 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 Counterpoint Tactical 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 Counterpoint Tactical Municipal, you can compare the effects of market volatilities on Baird Strategic and Counterpoint Tactical 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 Counterpoint Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Strategic and Counterpoint Tactical.
Diversification Opportunities for Baird Strategic and Counterpoint Tactical
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Baird and Counterpoint is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Baird Strategic Municipal and Counterpoint Tactical Municipa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Counterpoint Tactical 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 Counterpoint Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Counterpoint Tactical has no effect on the direction of Baird Strategic i.e., Baird Strategic and Counterpoint Tactical go up and down completely randomly.
Pair Corralation between Baird Strategic and Counterpoint Tactical
Assuming the 90 days horizon Baird Strategic is expected to generate 1.63 times less return on investment than Counterpoint Tactical. But when comparing it to its historical volatility, Baird Strategic Municipal is 1.79 times less risky than Counterpoint Tactical. It trades about 0.15 of its potential returns per unit of risk. Counterpoint Tactical Municipal is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,083 in Counterpoint Tactical Municipal on August 24, 2024 and sell it today you would earn a total of 12.00 from holding Counterpoint Tactical Municipal or generate 1.11% 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. Counterpoint Tactical Municipa
Performance |
| Timeline |
| Baird Strategic Municipal |
| Counterpoint Tactical |
Baird Strategic and Counterpoint Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Strategic and Counterpoint Tactical
The main advantage of trading using opposite Baird Strategic and Counterpoint Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Strategic position performs unexpectedly, Counterpoint Tactical 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 Counterpoint Tactical will offset losses from the drop in Counterpoint Tactical's long position.| Baird Strategic vs. Vanguard Intermediate Term Tax Exempt | Baird Strategic vs. Vanguard Intermediate Term Tax Exempt | Baird Strategic vs. Tax Exempt Bond | Baird Strategic vs. Tax Exempt Bond |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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