Correlation Between Ab High and Baron Growth
Can any of the company-specific risk be diversified away by investing in both Ab High and Baron Growth 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 Ab High and Baron Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab High Income and Baron Growth Fund, you can compare the effects of market volatilities on Ab High and Baron Growth 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 Ab High with a short position of Baron Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab High and Baron Growth.
Diversification Opportunities for Ab High and Baron Growth
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between AGDAX and Baron is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ab High Income and Baron Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Growth and Ab High 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 Ab High Income are associated (or correlated) with Baron Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Growth has no effect on the direction of Ab High i.e., Ab High and Baron Growth go up and down completely randomly.
Pair Corralation between Ab High and Baron Growth
Assuming the 90 days horizon Ab High is expected to generate 5.95 times less return on investment than Baron Growth. But when comparing it to its historical volatility, Ab High Income is 4.92 times less risky than Baron Growth. It trades about 0.19 of its potential returns per unit of risk. Baron Growth Fund is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 9,462 in Baron Growth Fund on November 9, 2024 and sell it today you would earn a total of 403.00 from holding Baron Growth Fund or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab High Income vs. Baron Growth Fund
Performance |
| Timeline |
| Ab High Income |
| Baron Growth |
Ab High and Baron Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab High and Baron Growth
The main advantage of trading using opposite Ab High and Baron Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab High position performs unexpectedly, Baron Growth 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 Growth will offset losses from the drop in Baron Growth's long position.The idea behind Ab High Income and Baron Growth Fund 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.| Baron Growth vs. Sp Smallcap 600 | Baron Growth vs. Nuveen Small Cap | Baron Growth vs. Needham Small Cap | Baron Growth vs. Rbc Small Cap |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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