Correlation Between Federated Short-intermedia and Baird Municipal
Can any of the company-specific risk be diversified away by investing in both Federated Short-intermedia and Baird 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 Federated Short-intermedia and Baird Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Short Intermediate Duration and Baird Municipal Bond, you can compare the effects of market volatilities on Federated Short-intermedia and Baird 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 Federated Short-intermedia with a short position of Baird Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Short-intermedia and Baird Municipal.
Diversification Opportunities for Federated Short-intermedia and Baird Municipal
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Federated and Baird is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Federated Short Intermediate D and Baird Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Municipal Bond and Federated Short-intermedia 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 Federated Short Intermediate Duration are associated (or correlated) with Baird Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Municipal Bond has no effect on the direction of Federated Short-intermedia i.e., Federated Short-intermedia and Baird Municipal go up and down completely randomly.
Pair Corralation between Federated Short-intermedia and Baird Municipal
Assuming the 90 days horizon Federated Short-intermedia is expected to generate 1.16 times less return on investment than Baird Municipal. But when comparing it to its historical volatility, Federated Short Intermediate Duration is 1.78 times less risky than Baird Municipal. It trades about 0.13 of its potential returns per unit of risk. Baird Municipal Bond is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 975.00 in Baird Municipal Bond on September 1, 2024 and sell it today you would earn a total of 30.00 from holding Baird Municipal Bond or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Short Intermediate D vs. Baird Municipal Bond
Performance |
| Timeline |
| Federated Short-intermedia |
| Baird Municipal Bond |
Federated Short-intermedia and Baird Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Short-intermedia and Baird Municipal
The main advantage of trading using opposite Federated Short-intermedia and Baird Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Short-intermedia position performs unexpectedly, Baird 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 Baird Municipal will offset losses from the drop in Baird Municipal's long position.The idea behind Federated Short Intermediate Duration and Baird Municipal Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Baird Municipal vs. Ab Bond Inflation | Baird Municipal vs. Guidepath Managed Futures | Baird Municipal vs. Arrow Managed Futures | Baird Municipal vs. Ab Bond Inflation |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |