Correlation Between Barings Active and Baird Strategic
Can any of the company-specific risk be diversified away by investing in both Barings Active and Baird Strategic 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 Barings Active and Baird Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Active Short and Baird Strategic Municipal, you can compare the effects of market volatilities on Barings Active and Baird Strategic 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 Barings Active with a short position of Baird Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Baird Strategic.
Diversification Opportunities for Barings Active and Baird Strategic
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Baird is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Baird Strategic Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Strategic Municipal and Barings Active 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 Barings Active Short are associated (or correlated) with Baird Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Strategic Municipal has no effect on the direction of Barings Active i.e., Barings Active and Baird Strategic go up and down completely randomly.
Pair Corralation between Barings Active and Baird Strategic
Assuming the 90 days horizon Barings Active Short is expected to generate 0.62 times more return on investment than Baird Strategic. However, Barings Active Short is 1.61 times less risky than Baird Strategic. It trades about 0.03 of its potential returns per unit of risk. Baird Strategic Municipal is currently generating about -0.05 per unit of risk. If you would invest 924.00 in Barings Active Short on October 9, 2024 and sell it today you would earn a total of 1.00 from holding Barings Active Short or generate 0.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 97.5% |
Values | Daily Returns |
Barings Active Short vs. Baird Strategic Municipal
Performance |
Timeline |
Barings Active Short |
Baird Strategic Municipal |
Barings Active and Baird Strategic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Barings Active and Baird Strategic
The main advantage of trading using opposite Barings Active and Baird Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Baird Strategic 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 Strategic will offset losses from the drop in Baird Strategic's long position.Barings Active vs. Dreyfus Government Cash | Barings Active vs. Schwab Government Money | Barings Active vs. Inverse Government Long | Barings Active vs. Franklin Adjustable Government |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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