Correlation Between Baldwin Lyons and 3M
Can any of the company-specific risk be diversified away by investing in both Baldwin Lyons and 3M 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 Baldwin Lyons and 3M into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baldwin Lyons and 3M Company, you can compare the effects of market volatilities on Baldwin Lyons and 3M 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 Baldwin Lyons with a short position of 3M. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baldwin Lyons and 3M.
Diversification Opportunities for Baldwin Lyons and 3M
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Baldwin and 3M is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Baldwin Lyons and 3M Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3M Company and Baldwin Lyons 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 Baldwin Lyons are associated (or correlated) with 3M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3M Company has no effect on the direction of Baldwin Lyons i.e., Baldwin Lyons and 3M go up and down completely randomly.
Pair Corralation between Baldwin Lyons and 3M
If you would invest 8,581 in 3M Company on January 26, 2024 and sell it today you would earn a total of 621.00 from holding 3M Company or generate 7.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Baldwin Lyons vs. 3M Company
Performance |
| Timeline |
| Baldwin Lyons |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| 3M Company |
Baldwin Lyons and 3M Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baldwin Lyons and 3M
The main advantage of trading using opposite Baldwin Lyons and 3M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baldwin Lyons position performs unexpectedly, 3M 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 3M will offset losses from the drop in 3M's long position.| Baldwin Lyons vs. Park Ohio Holdings | Baldwin Lyons vs. Loandepot | Baldwin Lyons vs. Hertz Global Holdings | Baldwin Lyons vs. ChampionX |
| 3M vs. MDU Resources Group | 3M vs. Valmont Industries | 3M vs. Griffon | 3M vs. Compass Diversified Holdings |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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