Correlation Between Payden Core and Baird Small/mid
Can any of the company-specific risk be diversified away by investing in both Payden Core and Baird Small/mid 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 Payden Core and Baird Small/mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden Core Bond and Baird Smallmid Cap, you can compare the effects of market volatilities on Payden Core and Baird Small/mid 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 Payden Core with a short position of Baird Small/mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Core and Baird Small/mid.
Diversification Opportunities for Payden Core and Baird Small/mid
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Payden and Baird is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Payden Core Bond and Baird Smallmid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Smallmid Cap and Payden Core 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 Payden Core Bond are associated (or correlated) with Baird Small/mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Smallmid Cap has no effect on the direction of Payden Core i.e., Payden Core and Baird Small/mid go up and down completely randomly.
Pair Corralation between Payden Core and Baird Small/mid
Assuming the 90 days horizon Payden Core is expected to generate 13.43 times less return on investment than Baird Small/mid. But when comparing it to its historical volatility, Payden Core Bond is 3.8 times less risky than Baird Small/mid. It trades about 0.11 of its potential returns per unit of risk. Baird Smallmid Cap is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 1,633 in Baird Smallmid Cap on September 4, 2024 and sell it today you would earn a total of 166.00 from holding Baird Smallmid Cap or generate 10.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Payden Core Bond vs. Baird Smallmid Cap
Performance |
| Timeline |
| Payden Core Bond |
| Baird Smallmid Cap |
Payden Core and Baird Small/mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Core and Baird Small/mid
The main advantage of trading using opposite Payden Core and Baird Small/mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Core position performs unexpectedly, Baird Small/mid 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 Small/mid will offset losses from the drop in Baird Small/mid's long position.| Payden Core vs. Payden Porate Bond | Payden Core vs. Payden Absolute Return | Payden Core vs. Payden Absolute Return | Payden Core vs. Payden Emerging Markets |
| Baird Small/mid vs. Artisan High Income | Baird Small/mid vs. Bbh Intermediate Municipal | Baird Small/mid vs. Maryland Tax Free Bond | Baird Small/mid 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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