Correlation Between Baron Capital and Capital Financial

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

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

Diversification Opportunities for Baron Capital and Capital Financial

0.0

Correlation Coefficient

Baron Capital  Capital Financial

Pay attention - limited upside

The 3 months correlation between Baron and Capital is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Baron Capital and Capital Financial Gl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Financial and Baron Capital 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 Baron Capital are associated (or correlated) with Capital Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Financial has no effect on the direction of Baron Capital i.e., Baron Capital and Capital Financial go up and down completely randomly.

Pair Corralation between Baron Capital and Capital Financial

If you would invest  0.01  in Baron Capital on December 28, 2024 and sell it today you would earn a total of  0.01  from holding Baron Capital or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Baron Capital  vs.  Capital Financial Gl

Baron Capital

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Baron Capital are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Baron Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Capital Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Capital Financial Gl has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Capital Financial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Baron Capital and Capital Financial

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

The idea behind Baron Capital and Capital Financial Gl 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.