Correlation Between Baron Small and Bny Mellon
Can any of the company-specific risk be diversified away by investing in both Baron Small and Bny Mellon 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 Small and Bny Mellon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Small Cap and Bny Mellon Mid, you can compare the effects of market volatilities on Baron Small and Bny Mellon 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 Small with a short position of Bny Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Small and Bny Mellon.
Diversification Opportunities for Baron Small and Bny Mellon
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baron and Bny is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Baron Small Cap and Bny Mellon Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bny Mellon Mid and Baron Small 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 Small Cap are associated (or correlated) with Bny Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bny Mellon Mid has no effect on the direction of Baron Small i.e., Baron Small and Bny Mellon go up and down completely randomly.
Pair Corralation between Baron Small and Bny Mellon
Assuming the 90 days horizon Baron Small Cap is expected to under-perform the Bny Mellon. In addition to that, Baron Small is 1.29 times more volatile than Bny Mellon Mid. It trades about -0.02 of its total potential returns per unit of risk. Bny Mellon Mid is currently generating about 0.04 per unit of volatility. If you would invest 1,375 in Bny Mellon Mid on December 2, 2024 and sell it today you would earn a total of 18.00 from holding Bny Mellon Mid or generate 1.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Baron Small Cap vs. Bny Mellon Mid
Performance |
Timeline |
Baron Small Cap |
Bny Mellon Mid |
Baron Small and Bny Mellon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Baron Small and Bny Mellon
The main advantage of trading using opposite Baron Small and Bny Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Small position performs unexpectedly, Bny Mellon 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 Bny Mellon will offset losses from the drop in Bny Mellon's long position.Baron Small vs. Baron Growth Fund | Baron Small vs. Baron Asset Fund | Baron Small vs. Baron Partners Fund | Baron Small vs. Nasdaq 100 Fund Investor |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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