Correlation Between ANT and Baron Emerging

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

By analyzing existing cross correlation between ANT and Baron Emerging Markets, you can compare the effects of market volatilities on ANT and Baron Emerging 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 ANT with a short position of Baron Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and Baron Emerging.

Diversification Opportunities for ANT and Baron Emerging

0.34

Correlation Coefficient

ANT  Baron Emerging

Weak diversification

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

Pair Corralation between ANT and Baron Emerging

Assuming the 90 days trading horizon ANT is expected to generate 28.28 times more return on investment than Baron Emerging. However, ANT is 28.28 times more volatile than Baron Emerging Markets. It trades about 0.12 of its potential returns per unit of risk. Baron Emerging Markets is currently generating about -0.29 per unit of risk. If you would invest  125.00  in ANT on October 12, 2024 and sell it today you would earn a total of  22.00  from holding ANT or generate 17.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

ANT  vs.  Baron Emerging Markets

ANT

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, ANT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Baron Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baron Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with ANT and Baron Emerging

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

The idea behind ANT and Baron Emerging Markets 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.