Correlation Between Ishares Municipal and Baird Quality
Can any of the company-specific risk be diversified away by investing in both Ishares Municipal and Baird Quality 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 Ishares Municipal and Baird Quality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ishares Municipal Bond and Baird Quality Intermediate, you can compare the effects of market volatilities on Ishares Municipal and Baird Quality 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 Ishares Municipal with a short position of Baird Quality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ishares Municipal and Baird Quality.
Diversification Opportunities for Ishares Municipal and Baird Quality
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Ishares and Baird is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Ishares Municipal Bond and Baird Quality Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Quality Interm and Ishares Municipal 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 Ishares Municipal Bond are associated (or correlated) with Baird Quality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Quality Interm has no effect on the direction of Ishares Municipal i.e., Ishares Municipal and Baird Quality go up and down completely randomly.
Pair Corralation between Ishares Municipal and Baird Quality
Assuming the 90 days horizon Ishares Municipal Bond is expected to generate 1.83 times more return on investment than Baird Quality. However, Ishares Municipal is 1.83 times more volatile than Baird Quality Intermediate. It trades about 0.42 of its potential returns per unit of risk. Baird Quality Intermediate is currently generating about 0.47 per unit of risk. If you would invest 1,054 in Ishares Municipal Bond on July 19, 2025 and sell it today you would earn a total of 49.00 from holding Ishares Municipal Bond or generate 4.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ishares Municipal Bond vs. Baird Quality Intermediate
Performance |
| Timeline |
| Ishares Municipal Bond |
| Baird Quality Interm |
Ishares Municipal and Baird Quality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ishares Municipal and Baird Quality
The main advantage of trading using opposite Ishares Municipal and Baird Quality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ishares Municipal position performs unexpectedly, Baird Quality 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 Quality will offset losses from the drop in Baird Quality's long position.| Ishares Municipal vs. Blackrock California Municipal | Ishares Municipal vs. Blackrock Balanced Capital | Ishares Municipal vs. Mkeax | Ishares Municipal vs. Blackrock Eurofund Class |
| Baird Quality vs. Baird Aggregate Bond | Baird Quality vs. Baird Aggregate Bond | Baird Quality vs. Baird Short Term Bond | Baird Quality vs. Baird Short Term Bond |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |