Correlation Between Akre Focus and Baron Partners
Can any of the company-specific risk be diversified away by investing in both Akre Focus and Baron Partners 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 Akre Focus and Baron Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akre Focus Fund and Baron Partners Fund, you can compare the effects of market volatilities on Akre Focus and Baron Partners 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 Akre Focus with a short position of Baron Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akre Focus and Baron Partners.
Diversification Opportunities for Akre Focus and Baron Partners
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Akre and Baron is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Akre Focus Fund and Baron Partners Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Partners and Akre Focus 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 Akre Focus Fund are associated (or correlated) with Baron Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Partners has no effect on the direction of Akre Focus i.e., Akre Focus and Baron Partners go up and down completely randomly.
Pair Corralation between Akre Focus and Baron Partners
Assuming the 90 days horizon Akre Focus is expected to generate 1.66 times less return on investment than Baron Partners. But when comparing it to its historical volatility, Akre Focus Fund is 1.96 times less risky than Baron Partners. It trades about 0.09 of its potential returns per unit of risk. Baron Partners Fund is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 11,604 in Baron Partners Fund on September 12, 2024 and sell it today you would earn a total of 9,448 from holding Baron Partners Fund or generate 81.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akre Focus Fund vs. Baron Partners Fund
Performance |
| Timeline |
| Akre Focus Fund |
| Baron Partners |
Akre Focus and Baron Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akre Focus and Baron Partners
The main advantage of trading using opposite Akre Focus and Baron Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akre Focus position performs unexpectedly, Baron Partners 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 Partners will offset losses from the drop in Baron Partners' long position.| Akre Focus vs. Akre Focus Fund | Akre Focus vs. Akre Focus Fund | Akre Focus vs. T Rowe Price | Akre Focus vs. Aqr Diversified Arbitrage |
| Baron Partners vs. Baron Partners | Baron Partners vs. Baron Focused Growth | Baron Partners vs. Baron Opportunity Fund | Baron Partners vs. Baron Partners Fund |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |