Correlation Between Baron Health and Baron Fifth
Can any of the company-specific risk be diversified away by investing in both Baron Health and Baron Fifth 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 Health and Baron Fifth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Health Care and Baron Fifth Avenue, you can compare the effects of market volatilities on Baron Health and Baron Fifth 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 Health with a short position of Baron Fifth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and Baron Fifth.
Diversification Opportunities for Baron Health and Baron Fifth
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baron and Baron is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care and Baron Fifth Avenue in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Fifth Avenue and Baron Health 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 Health Care are associated (or correlated) with Baron Fifth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Fifth Avenue has no effect on the direction of Baron Health i.e., Baron Health and Baron Fifth go up and down completely randomly.
Pair Corralation between Baron Health and Baron Fifth
Assuming the 90 days horizon Baron Health Care is expected to generate 0.59 times more return on investment than Baron Fifth. However, Baron Health Care is 1.71 times less risky than Baron Fifth. It trades about 0.22 of its potential returns per unit of risk. Baron Fifth Avenue is currently generating about 0.09 per unit of risk. If you would invest 1,963 in Baron Health Care on October 26, 2024 and sell it today you would earn a total of 68.00 from holding Baron Health Care or generate 3.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 94.74% |
Values | Daily Returns |
Baron Health Care vs. Baron Fifth Avenue
Performance |
Timeline |
Baron Health Care |
Baron Fifth Avenue |
Baron Health and Baron Fifth Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Baron Health and Baron Fifth
The main advantage of trading using opposite Baron Health and Baron Fifth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health position performs unexpectedly, Baron Fifth 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 Baron Fifth will offset losses from the drop in Baron Fifth's long position.Baron Health vs. Atac Inflation Rotation | Baron Health vs. Ab Bond Inflation | Baron Health vs. Tiaa Cref Inflation Linked Bond | Baron Health vs. Credit Suisse Multialternative |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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