Correlation Between Baron Durable and Baron Focused
Can any of the company-specific risk be diversified away by investing in both Baron Durable and Baron Focused 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 Durable and Baron Focused into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Durable Advantage and Baron Focused Growth, you can compare the effects of market volatilities on Baron Durable and Baron Focused 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 Durable with a short position of Baron Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Durable and Baron Focused.
Diversification Opportunities for Baron Durable and Baron Focused
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baron and Baron is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Baron Durable Advantage and Baron Focused Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Focused Growth and Baron Durable 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 Durable Advantage are associated (or correlated) with Baron Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Focused Growth has no effect on the direction of Baron Durable i.e., Baron Durable and Baron Focused go up and down completely randomly.
Pair Corralation between Baron Durable and Baron Focused
Assuming the 90 days horizon Baron Durable is expected to generate 2.25 times less return on investment than Baron Focused. But when comparing it to its historical volatility, Baron Durable Advantage is 1.03 times less risky than Baron Focused. It trades about 0.12 of its potential returns per unit of risk. Baron Focused Growth is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 4,076 in Baron Focused Growth on August 29, 2024 and sell it today you would earn a total of 705.00 from holding Baron Focused Growth or generate 17.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Durable Advantage vs. Baron Focused Growth
Performance |
| Timeline |
| Baron Durable Advantage |
| Baron Focused Growth |
Baron Durable and Baron Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Durable and Baron Focused
The main advantage of trading using opposite Baron Durable and Baron Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Durable position performs unexpectedly, Baron Focused 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 Focused will offset losses from the drop in Baron Focused's long position.| Baron Durable vs. Baron Intl Growth | Baron Durable vs. Baron International Growth | Baron Durable vs. Baron Real Estate | Baron Durable vs. Baron Real Estate |
| Baron Focused vs. Baron Partners Fund | Baron Focused vs. Baron Opportunity Fund | Baron Focused vs. Baron Focused Growth | Baron Focused vs. Baron Fifth Avenue |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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