Correlation Between Total Return and Baird Core
Can any of the company-specific risk be diversified away by investing in both Total Return and Baird Core 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 Total Return and Baird Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Total Return Fund and Baird E Plus, you can compare the effects of market volatilities on Total Return and Baird Core 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 Total Return with a short position of Baird Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Total Return and Baird Core.
Diversification Opportunities for Total Return and Baird Core
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Total and Baird is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Total Return Fund and Baird E Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird E Plus and Total Return 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 Total Return Fund are associated (or correlated) with Baird Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird E Plus has no effect on the direction of Total Return i.e., Total Return and Baird Core go up and down completely randomly.
Pair Corralation between Total Return and Baird Core
Assuming the 90 days horizon Total Return is expected to generate 1.28 times less return on investment than Baird Core. In addition to that, Total Return is 1.1 times more volatile than Baird E Plus. It trades about 0.03 of its total potential returns per unit of risk. Baird E Plus is currently generating about 0.04 per unit of volatility. If you would invest 957.00 in Baird E Plus on August 26, 2024 and sell it today you would earn a total of 54.00 from holding Baird E Plus or generate 5.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Total Return Fund vs. Baird E Plus
Performance |
| Timeline |
| Total Return |
| Baird E Plus |
Total Return and Baird Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Total Return and Baird Core
The main advantage of trading using opposite Total Return and Baird Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Return position performs unexpectedly, Baird Core 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 Core will offset losses from the drop in Baird Core's long position.| Total Return vs. Pimco Rae Worldwide | Total Return vs. Pimco Rae Worldwide | Total Return vs. Pimco Rae Worldwide | Total Return vs. Pimco Rae Worldwide |
| Baird Core vs. Metropolitan West Total | Baird Core vs. Western Asset E | Baird Core vs. John Hancock Disciplined | Baird Core vs. American Beacon Bridgeway |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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