Correlation Between Baird Strategic and Oakhurst Short

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

By analyzing existing cross correlation between Baird Strategic Municipal and Oakhurst Short Duration, you can compare the effects of market volatilities on Baird Strategic and Oakhurst Short 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 Strategic with a short position of Oakhurst Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Strategic and Oakhurst Short.

Diversification Opportunities for Baird Strategic and Oakhurst Short

0.34

Correlation Coefficient

Baird Strategic  Oakhurst Short

Weak diversification

The 3 months correlation between Baird and Oakhurst is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Baird Strategic Municipal and Oakhurst Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakhurst Short Duration and Baird Strategic 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 Strategic Municipal are associated (or correlated) with Oakhurst Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakhurst Short Duration has no effect on the direction of Baird Strategic i.e., Baird Strategic and Oakhurst Short go up and down completely randomly.

Pair Corralation between Baird Strategic and Oakhurst Short

Assuming the 90 days horizon Baird Strategic Municipal is expected to under-perform the Oakhurst Short. But the mutual fund apears to be less risky and, when comparing its historical volatility, Baird Strategic Municipal is 1.09 times less risky than Oakhurst Short. The mutual fund trades about -0.33 of its potential returns per unit of risk. The Oakhurst Short Duration is currently generating about -0.29 of returns per unit of risk over similar time horizon. If you would invest  901.00  in Oakhurst Short Duration on October 9, 2024 and sell it today you would lose (9.00) from holding Oakhurst Short Duration or give up 1.0% of portfolio value over 90 days.

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

Baird Strategic Municipal  vs.  Oakhurst Short Duration

Baird Strategic Municipal

Risk-Adjusted Performance

0 of 100

Very Weak

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

Oakhurst Short Duration

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oakhurst Short Duration are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical indicators, Oakhurst Short 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 Strategic and Oakhurst Short

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

The idea behind Baird Strategic Municipal and Oakhurst Short Duration 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.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.