Correlation Between Baird Aggregate and Tcw Core

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

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

Diversification Opportunities for Baird Aggregate and Tcw Core

1.0

Correlation Coefficient

Baird Aggregate  Tcw Core

No risk reduction

The 3 months correlation between Baird and Tcw is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Baird Aggregate Bond and Tcw E Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tcw E Fixed and Baird Aggregate 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 Aggregate Bond are associated (or correlated) with Tcw Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tcw E Fixed has no effect on the direction of Baird Aggregate i.e., Baird Aggregate and Tcw Core go up and down completely randomly.

Pair Corralation between Baird Aggregate and Tcw Core

Assuming the 90 days horizon Baird Aggregate is expected to generate 2.31 times less return on investment than Tcw Core. But when comparing it to its historical volatility, Baird Aggregate Bond is 1.07 times less risky than Tcw Core. It trades about 0.04 of its potential returns per unit of risk. Tcw E Fixed is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  963.00  in Tcw E Fixed on August 31, 2024 and sell it today you would earn a total of  7.00  from holding Tcw E Fixed or generate 0.73% return on investment over 90 days.

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

Baird Aggregate Bond  vs.  Tcw E Fixed

Baird Aggregate Bond

Risk-Adjusted Performance

0 of 100

Very Weak

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

Tcw E Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tcw E Fixed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Tcw Core 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 Aggregate and Tcw Core

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

The idea behind Baird Aggregate Bond and Tcw E Fixed 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.