Correlation Between Ambrus Core and Baird Smallcap

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

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

Diversification Opportunities for Ambrus Core and Baird Smallcap

-0.34

Correlation Coefficient

Ambrus Core  Baird Smallcap

Very good diversification

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

Pair Corralation between Ambrus Core and Baird Smallcap

Assuming the 90 days horizon Ambrus Core Bond is expected to generate 0.15 times more return on investment than Baird Smallcap. However, Ambrus Core Bond is 6.54 times less risky than Baird Smallcap. It trades about -0.4 of its potential returns per unit of risk. Baird Smallcap Value is currently generating about -0.13 per unit of risk. If you would invest  1,000.00  in Ambrus Core Bond on October 8, 2024 and sell it today you would lose (12.00) from holding Ambrus Core Bond or give up 1.2% of portfolio value over 90 days.

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

Ambrus Core Bond  vs.  Baird Smallcap Value

Ambrus Core Bond

Risk-Adjusted Performance

0 of 100

Very Weak

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

Baird Smallcap Value

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Baird Smallcap Value are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Baird Smallcap showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ambrus Core and Baird Smallcap

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

The idea behind Ambrus Core Bond and Baird Smallcap Value 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.