Correlation Between Champlain Small and Baird Aggregate
Can any of the company-specific risk be diversified away by investing in both Champlain Small and Baird Aggregate 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 Champlain Small and Baird Aggregate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Small and Baird Aggregate Bond, you can compare the effects of market volatilities on Champlain Small and Baird Aggregate 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 Champlain Small with a short position of Baird Aggregate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and Baird Aggregate.
Diversification Opportunities for Champlain Small and Baird Aggregate
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Champlain and BAIRD is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and Baird Aggregate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Aggregate Bond and Champlain Small 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 Champlain Small are associated (or correlated) with Baird Aggregate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Aggregate Bond has no effect on the direction of Champlain Small i.e., Champlain Small and Baird Aggregate go up and down completely randomly.
Pair Corralation between Champlain Small and Baird Aggregate
Assuming the 90 days horizon Champlain Small is expected to generate 3.88 times more return on investment than Baird Aggregate. However, Champlain Small is 3.88 times more volatile than Baird Aggregate Bond. It trades about 0.18 of its potential returns per unit of risk. Baird Aggregate Bond is currently generating about -0.13 per unit of risk. If you would invest 2,310 in Champlain Small on August 29, 2024 and sell it today you would earn a total of 247.00 from holding Champlain Small or generate 10.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Champlain Small vs. Baird Aggregate Bond
Performance |
| Timeline |
| Champlain Small |
| Baird Aggregate Bond |
Champlain Small and Baird Aggregate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Small and Baird Aggregate
The main advantage of trading using opposite Champlain Small and Baird Aggregate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small position performs unexpectedly, Baird Aggregate 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 Baird Aggregate will offset losses from the drop in Baird Aggregate's long position.| Champlain Small vs. Putnam Equity Income | Champlain Small vs. Putnam Growth Opportunities | Champlain Small vs. HUMANA INC | Champlain Small vs. Aquagold International |
| Baird Aggregate vs. Vanguard Total Bond | Baird Aggregate vs. Vanguard Total Bond | Baird Aggregate vs. Vanguard Total Bond | Baird Aggregate vs. Vanguard Total 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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