Correlation Between Baron Emerging and Victory Trivalent

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

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

Diversification Opportunities for Baron Emerging and Victory Trivalent

0.75

Correlation Coefficient

Baron Emerging  Victory Trivalent

Poor diversification

The 3 months correlation between BARON and Victory is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Baron Emerging Markets and Victory Trivalent Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Trivalent and Baron Emerging 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 Emerging Markets are associated (or correlated) with Victory Trivalent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Trivalent has no effect on the direction of Baron Emerging i.e., Baron Emerging and Victory Trivalent go up and down completely randomly.

Pair Corralation between Baron Emerging and Victory Trivalent

Assuming the 90 days horizon Baron Emerging is expected to generate 1.81 times less return on investment than Victory Trivalent. In addition to that, Baron Emerging is 1.23 times more volatile than Victory Trivalent International. It trades about 0.07 of its total potential returns per unit of risk. Victory Trivalent International is currently generating about 0.16 per unit of volatility. If you would invest  1,477  in Victory Trivalent International on December 21, 2024 and sell it today you would earn a total of  125.00  from holding Victory Trivalent International or generate 8.46% return on investment over 90 days.

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

Baron Emerging Markets  vs.  Victory Trivalent Internationa

Baron Emerging Markets

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Baron Emerging Markets are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Baron Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Victory Trivalent

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Victory Trivalent International are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Victory Trivalent may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Baron Emerging and Victory Trivalent

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

The idea behind Baron Emerging Markets and Victory Trivalent International 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.