Correlation Between Moderate Duration and Baird Strategic
Can any of the company-specific risk be diversified away by investing in both Moderate Duration and Baird Strategic 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 Moderate Duration and Baird Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moderate Duration Fund and Baird Strategic Municipal, you can compare the effects of market volatilities on Moderate Duration and Baird Strategic 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 Moderate Duration with a short position of Baird Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moderate Duration and Baird Strategic.
Diversification Opportunities for Moderate Duration and Baird Strategic
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Moderate and Baird is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Moderate Duration Fund and Baird Strategic Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Strategic Municipal and Moderate Duration 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 Moderate Duration Fund are associated (or correlated) with Baird Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Strategic Municipal has no effect on the direction of Moderate Duration i.e., Moderate Duration and Baird Strategic go up and down completely randomly.
Pair Corralation between Moderate Duration and Baird Strategic
Assuming the 90 days horizon Moderate Duration is expected to generate 1.07 times less return on investment than Baird Strategic. In addition to that, Moderate Duration is 1.44 times more volatile than Baird Strategic Municipal. It trades about 0.13 of its total potential returns per unit of risk. Baird Strategic Municipal is currently generating about 0.2 per unit of volatility. 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 |
Moderate Duration Fund vs. Baird Strategic Municipal
Performance |
| Timeline |
| Moderate Duration |
| Baird Strategic Municipal |
Moderate Duration and Baird Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moderate Duration and Baird Strategic
The main advantage of trading using opposite Moderate Duration and Baird Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderate Duration position performs unexpectedly, Baird Strategic 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 Strategic will offset losses from the drop in Baird Strategic's long position.| Moderate Duration vs. Pimco Rae Worldwide | Moderate Duration vs. Pimco Rae Worldwide | Moderate Duration vs. Pimco Rae Worldwide | Moderate Duration vs. Pimco Rae Worldwide |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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