Correlation Between Baron Emerging and Baird Aggregate
Can any of the company-specific risk be diversified away by investing in both Baron Emerging and Baird Aggregate 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 Baron Emerging and Baird Aggregate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Emerging Markets and Baird Aggregate Bond, you can compare the effects of market volatilities on Baron Emerging and Baird Aggregate 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 Baron Emerging with a short position of Baird Aggregate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Emerging and Baird Aggregate.
Diversification Opportunities for Baron Emerging and Baird Aggregate
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Baron and Baird is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Baron Emerging Markets and Baird Aggregate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Aggregate Bond and Baron Emerging 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 Baron Emerging Markets are associated (or correlated) with Baird Aggregate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Aggregate Bond has no effect on the direction of Baron Emerging i.e., Baron Emerging and Baird Aggregate go up and down completely randomly.
Pair Corralation between Baron Emerging and Baird Aggregate
Assuming the 90 days horizon Baron Emerging Markets is expected to under-perform the Baird Aggregate. In addition to that, Baron Emerging is 2.93 times more volatile than Baird Aggregate Bond. It trades about -0.01 of its total potential returns per unit of risk. Baird Aggregate Bond is currently generating about 0.06 per unit of volatility. If you would invest 1,019 in Baird Aggregate Bond on December 5, 2024 and sell it today you would earn a total of 11.00 from holding Baird Aggregate Bond or generate 1.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Baron Emerging Markets vs. Baird Aggregate Bond
Performance |
Timeline |
Baron Emerging Markets |
Baird Aggregate Bond |
Baron Emerging and Baird Aggregate Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Baron Emerging and Baird Aggregate
The main advantage of trading using opposite Baron Emerging and Baird Aggregate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Emerging position performs unexpectedly, Baird Aggregate 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 Aggregate will offset losses from the drop in Baird Aggregate's long position.Baron Emerging vs. Eaton Vance Income | Baron Emerging vs. Baird Aggregate Bond | Baron Emerging vs. Champlain Small | Baron Emerging vs. Mfs Emerging Markets |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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