Correlation Between Baron Discovery and Baron Fifth
Can any of the company-specific risk be diversified away by investing in both Baron Discovery and Baron Fifth 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 Discovery and Baron Fifth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Discovery Fund and Baron Fifth Avenue, you can compare the effects of market volatilities on Baron Discovery and Baron Fifth 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 Discovery with a short position of Baron Fifth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Discovery and Baron Fifth.
Diversification Opportunities for Baron Discovery and Baron Fifth
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Baron and Baron is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Baron Discovery Fund and Baron Fifth Avenue in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Fifth Avenue and Baron Discovery 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 Discovery Fund are associated (or correlated) with Baron Fifth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Fifth Avenue has no effect on the direction of Baron Discovery i.e., Baron Discovery and Baron Fifth go up and down completely randomly.
Pair Corralation between Baron Discovery and Baron Fifth
Assuming the 90 days horizon Baron Discovery is expected to generate 2.1 times less return on investment than Baron Fifth. But when comparing it to its historical volatility, Baron Discovery Fund is 1.13 times less risky than Baron Fifth. It trades about 0.03 of its potential returns per unit of risk. Baron Fifth Avenue is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,000 in Baron Fifth Avenue on January 14, 2025 and sell it today you would earn a total of 1,790 from holding Baron Fifth Avenue or generate 59.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Discovery Fund vs. Baron Fifth Avenue
Performance |
| Timeline |
| Baron Discovery |
| Baron Fifth Avenue |
Baron Discovery and Baron Fifth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Discovery and Baron Fifth
The main advantage of trading using opposite Baron Discovery and Baron Fifth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Discovery position performs unexpectedly, Baron Fifth 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 Fifth will offset losses from the drop in Baron Fifth's long position.| Baron Discovery vs. Baron Real Estate | Baron Discovery vs. Baron Real Estate | Baron Discovery vs. Baron Real Estate | Baron Discovery vs. Baron Small Cap |
| Baron Fifth vs. Vulcan Value Partners | Baron Fifth vs. Columbia Trarian Core | Baron Fifth vs. Calvert Global Energy | Baron Fifth vs. Baron Opportunity 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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