Correlation Between Baird Aggregate and Chautauqua International

Can any of the company-specific risk be diversified away by investing in both Baird Aggregate and Chautauqua International 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 Baird Aggregate and Chautauqua International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Baird Aggregate Bond and Chautauqua International Growth, you can compare the effects of market volatilities on Baird Aggregate and Chautauqua International 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 Baird Aggregate with a short position of Chautauqua International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Aggregate and Chautauqua International.

Diversification Opportunities for Baird Aggregate and Chautauqua International

0.52

Correlation Coefficient

Baird Aggregate  Chautauqua International

Very weak diversification

The 3 months correlation between Baird and Chautauqua is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Baird Aggregate Bond and Chautauqua International Growt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chautauqua International and Baird Aggregate 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 Baird Aggregate Bond are associated (or correlated) with Chautauqua International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chautauqua International has no effect on the direction of Baird Aggregate i.e., Baird Aggregate and Chautauqua International go up and down completely randomly.

Pair Corralation between Baird Aggregate and Chautauqua International

Assuming the 90 days horizon Baird Aggregate Bond is expected to generate 0.38 times more return on investment than Chautauqua International. However, Baird Aggregate Bond is 2.63 times less risky than Chautauqua International. It trades about -0.5 of its potential returns per unit of risk. Chautauqua International Growth is currently generating about -0.36 per unit of risk. If you would invest  988.00  in Baird Aggregate Bond on October 11, 2024 and sell it today you would lose (28.00) from holding Baird Aggregate Bond or give up 2.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Baird Aggregate Bond  vs.  Chautauqua International Growt

Baird Aggregate Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baird Aggregate Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Baird Aggregate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Chautauqua International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chautauqua International Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Chautauqua International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Baird Aggregate and Chautauqua International

The main advantage of trading using opposite Baird Aggregate and Chautauqua International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Aggregate position performs unexpectedly, Chautauqua International 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 Chautauqua International will offset losses from the drop in Chautauqua International's long position.

The idea behind Baird Aggregate Bond and Chautauqua International Growth 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.

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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.