Correlation Between Baron Emerging and Columbia Seligman

Can any of the company-specific risk be diversified away by investing in both Baron Emerging and Columbia Seligman 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 Columbia Seligman 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 Columbia Seligman Munications, you can compare the effects of market volatilities on Baron Emerging and Columbia Seligman 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 Columbia Seligman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Emerging and Columbia Seligman.

Diversification Opportunities for Baron Emerging and Columbia Seligman

0.0

Correlation Coefficient

Baron Emerging  Columbia Seligman

Pay attention - limited upside

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

Pair Corralation between Baron Emerging and Columbia Seligman

If you would invest  1,507  in Baron Emerging Markets on December 2, 2024 and sell it today you would earn a total of  19.00  from holding Baron Emerging Markets or generate 1.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Baron Emerging Markets  vs.  Columbia Seligman Munications

Baron Emerging Markets

Risk-Adjusted Performance

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 fairly strong forward indicators, Baron Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Columbia Seligman

Risk-Adjusted Performance

Very Weak

Over the last 90 days Columbia Seligman Munications has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Columbia Seligman is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Baron Emerging and Columbia Seligman

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

The idea behind Baron Emerging Markets and Columbia Seligman Munications 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.