Correlation Between Baron Fintech and Hanlon Tactical

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

By analyzing existing cross correlation between Baron Fintech and Hanlon Tactical Dividend, you can compare the effects of market volatilities on Baron Fintech and Hanlon Tactical 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 Hanlon Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Fintech and Hanlon Tactical.

Diversification Opportunities for Baron Fintech and Hanlon Tactical

0.87

Correlation Coefficient

Baron Fintech  Hanlon Tactical

Very poor diversification

The 3 months correlation between Baron and Hanlon is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Baron Fintech and Hanlon Tactical Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanlon Tactical Dividend 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 Hanlon Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanlon Tactical Dividend has no effect on the direction of Baron Fintech i.e., Baron Fintech and Hanlon Tactical go up and down completely randomly.

Pair Corralation between Baron Fintech and Hanlon Tactical

Assuming the 90 days horizon Baron Fintech is expected to generate 1.29 times more return on investment than Hanlon Tactical. However, Baron Fintech is 1.29 times more volatile than Hanlon Tactical Dividend. It trades about -0.04 of its potential returns per unit of risk. Hanlon Tactical Dividend is currently generating about -0.07 per unit of risk. If you would invest  1,772  in Baron Fintech on December 21, 2024 and sell it today you would lose (60.00) from holding Baron Fintech or give up 3.39% of portfolio value over 90 days.

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

Baron Fintech  vs.  Hanlon Tactical Dividend

Baron Fintech

Risk-Adjusted Performance

Very Weak

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

Hanlon Tactical Dividend

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hanlon Tactical Dividend has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Hanlon Tactical 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 Hanlon Tactical

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

The idea behind Baron Fintech and Hanlon Tactical Dividend 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.