Correlation Between Baird Intermediate and California Bond
Can any of the company-specific risk be diversified away by investing in both Baird Intermediate and California Bond 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 Intermediate and California Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baird Intermediate Bond and California Bond Fund, you can compare the effects of market volatilities on Baird Intermediate and California Bond 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 Intermediate with a short position of California Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Intermediate and California Bond.
Diversification Opportunities for Baird Intermediate and California Bond
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baird and California is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Baird Intermediate Bond and California Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Bond and Baird Intermediate 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 Intermediate Bond are associated (or correlated) with California Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Bond has no effect on the direction of Baird Intermediate i.e., Baird Intermediate and California Bond go up and down completely randomly.
Pair Corralation between Baird Intermediate and California Bond
Assuming the 90 days horizon Baird Intermediate Bond is expected to generate 0.67 times more return on investment than California Bond. However, Baird Intermediate Bond is 1.48 times less risky than California Bond. It trades about -0.32 of its potential returns per unit of risk. California Bond Fund is currently generating about -0.33 per unit of risk. If you would invest 1,095 in Baird Intermediate Bond on October 6, 2024 and sell it today you would lose (13.00) from holding Baird Intermediate Bond or give up 1.19% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Baird Intermediate Bond vs. California Bond Fund
Performance |
Timeline |
Baird Intermediate Bond |
California Bond |
Baird Intermediate and California Bond Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Baird Intermediate and California Bond
The main advantage of trading using opposite Baird Intermediate and California Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Intermediate position performs unexpectedly, California Bond 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 California Bond will offset losses from the drop in California Bond's long position.Baird Intermediate vs. Baird E Plus | Baird Intermediate vs. Tcw E Fixed | Baird Intermediate vs. Baird Aggregate Bond | Baird Intermediate vs. Pear Tree Polaris |
California Bond vs. Income Fund Income | California Bond vs. Usaa Nasdaq 100 | California Bond vs. Victory Diversified Stock | California Bond vs. Intermediate Term Bond Fund |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data |