Correlation Between Baron Fintech and The Emerging

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

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

Diversification Opportunities for Baron Fintech and The Emerging

-0.03

Correlation Coefficient

Baron Fintech  The Emerging

Good diversification

The 3 months correlation between Baron and The is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Baron Fintech and The Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets and Baron Fintech 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 Fintech are associated (or correlated) with The Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets has no effect on the direction of Baron Fintech i.e., Baron Fintech and The Emerging go up and down completely randomly.

Pair Corralation between Baron Fintech and The Emerging

Assuming the 90 days horizon Baron Fintech is expected to generate 0.91 times more return on investment than The Emerging. However, Baron Fintech is 1.1 times less risky than The Emerging. It trades about 0.15 of its potential returns per unit of risk. The Emerging Markets is currently generating about 0.04 per unit of risk. If you would invest  1,362  in Baron Fintech on September 4, 2024 and sell it today you would earn a total of  459.00  from holding Baron Fintech or generate 33.7% return on investment over 90 days.

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

Baron Fintech  vs.  The Emerging Markets

Baron Fintech

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Baron Fintech are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Baron Fintech showed solid returns over the last few months and may actually be approaching a breakup point.

Emerging Markets

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Emerging Markets are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, The Emerging 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 Fintech and The Emerging

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

The idea behind Baron Fintech and The 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.