Correlation Between Elcom International and Baron Select

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

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

Diversification Opportunities for Elcom International and Baron Select

0.0

Correlation Coefficient

Elcom International  Baron Select

Pay attention - limited upside

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

Pair Corralation between Elcom International and Baron Select

If you would invest (100.00) in Elcom International on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Elcom International or generate -100.0% return on investment over 90 days.

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

Elcom International  vs.  Baron Select Funds

Elcom International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Elcom International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Elcom International is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Baron Select Funds

Risk-Adjusted Performance

Very Weak

Over the last 90 days Baron Select Funds has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Elcom International and Baron Select

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

The idea behind Elcom International and Baron Select Funds 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.