Correlation Between Baron Discovery and Baron Growth
Can any of the company-specific risk be diversified away by investing in both Baron Discovery 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 Baron Discovery and Baron Growth 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 Growth Fund, you can compare the effects of market volatilities on Baron Discovery 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 Baron Discovery with a short position of Baron Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Discovery and Baron Growth.
Diversification Opportunities for Baron Discovery and Baron Growth
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Baron and Baron is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Baron Discovery Fund and Baron Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Growth 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 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 Baron Discovery i.e., Baron Discovery and Baron Growth go up and down completely randomly.
Pair Corralation between Baron Discovery and Baron Growth
Assuming the 90 days horizon Baron Discovery Fund is expected to generate 1.1 times more return on investment than Baron Growth. However, Baron Discovery is 1.1 times more volatile than Baron Growth Fund. It trades about 0.39 of its potential returns per unit of risk. Baron Growth Fund is currently generating about 0.12 per unit of risk. If you would invest 3,257 in Baron Discovery Fund on November 1, 2024 and sell it today you would earn a total of 285.00 from holding Baron Discovery Fund or generate 8.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Discovery Fund vs. Baron Growth Fund
Performance |
| Timeline |
| Baron Discovery |
| Baron Growth |
Baron Discovery and Baron Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Discovery and Baron Growth
The main advantage of trading using opposite Baron Discovery and Baron Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Discovery 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.| Baron Discovery vs. Baron Partners Fund | Baron Discovery vs. Baron Global Advantage | Baron Discovery vs. Baron Opportunity Fund | Baron Discovery vs. Baron Fifth Avenue |
| Baron Growth vs. Barings High Yield | Baron Growth vs. Virtus High Yield | Baron Growth vs. Prudential High Yield | Baron Growth vs. Ab High Income |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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