Correlation Between Scharf Fund and Baird Midcap
Can any of the company-specific risk be diversified away by investing in both Scharf Fund and Baird Midcap 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 Scharf Fund and Baird Midcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Fund Retail and Baird Midcap Fund, you can compare the effects of market volatilities on Scharf Fund and Baird Midcap 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 Scharf Fund with a short position of Baird Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Fund and Baird Midcap.
Diversification Opportunities for Scharf Fund and Baird Midcap
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Scharf and Baird is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Fund Retail and Baird Midcap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Midcap and Scharf Fund 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 Scharf Fund Retail are associated (or correlated) with Baird Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Midcap has no effect on the direction of Scharf Fund i.e., Scharf Fund and Baird Midcap go up and down completely randomly.
Pair Corralation between Scharf Fund and Baird Midcap
Assuming the 90 days horizon Scharf Fund Retail is expected to generate 0.6 times more return on investment than Baird Midcap. However, Scharf Fund Retail is 1.67 times less risky than Baird Midcap. It trades about 0.08 of its potential returns per unit of risk. Baird Midcap Fund is currently generating about 0.03 per unit of risk. If you would invest 4,964 in Scharf Fund Retail on September 14, 2024 and sell it today you would earn a total of 588.00 from holding Scharf Fund Retail or generate 11.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Fund Retail vs. Baird Midcap Fund
Performance |
| Timeline |
| Scharf Fund Retail |
| Baird Midcap |
Scharf Fund and Baird Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Fund and Baird Midcap
The main advantage of trading using opposite Scharf Fund and Baird Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Fund position performs unexpectedly, Baird Midcap 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 Midcap will offset losses from the drop in Baird Midcap's long position.| Scharf Fund vs. Scharf Global Opportunity | Scharf Fund vs. Scharf Balanced Opportunity | Scharf Fund vs. Scharf Balanced Opportunity | Scharf Fund vs. American Funds 2060 |
| Baird Midcap vs. Baird Aggregate Bond | Baird Midcap vs. Baird Aggregate Bond | Baird Midcap vs. Baird Short Term Bond | Baird Midcap vs. Baird Short Term 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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