Correlation Between Baron Emerging and Baron Focused
Can any of the company-specific risk be diversified away by investing in both Baron Emerging 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 Emerging 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 Emerging Markets and Baron Focused Growth, you can compare the effects of market volatilities on Baron Emerging 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 Emerging with a short position of Baron Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Emerging and Baron Focused.
Diversification Opportunities for Baron Emerging and Baron Focused
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Baron and Baron is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Baron Emerging Markets 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 Emerging 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 Emerging Markets 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 Emerging i.e., Baron Emerging and Baron Focused go up and down completely randomly.
Pair Corralation between Baron Emerging and Baron Focused
Assuming the 90 days horizon Baron Emerging Markets is expected to under-perform the Baron Focused. But the mutual fund apears to be less risky and, when comparing its historical volatility, Baron Emerging Markets is 1.27 times less risky than Baron Focused. The mutual fund trades about -0.21 of its potential returns per unit of risk. The Baron Focused Growth is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 4,209 in Baron Focused Growth on August 29, 2024 and sell it today you would earn a total of 355.00 from holding Baron Focused Growth or generate 8.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Emerging Markets vs. Baron Focused Growth
Performance |
| Timeline |
| Baron Emerging Markets |
| Baron Focused Growth |
Baron Emerging and Baron Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Emerging and Baron Focused
The main advantage of trading using opposite Baron Emerging and Baron Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Emerging 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 Emerging vs. Fidelity International Growth | Baron Emerging vs. Parnassus Mid Cap | Baron Emerging vs. Df Dent Midcap | Baron Emerging vs. Amg Timessquare International |
| Baron Focused vs. Sterling Capital Short | Baron Focused vs. Franklin Federal Limited Term | Baron Focused vs. Federated Short Intermediate Duration | Baron Focused vs. Barings Active Short |
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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