Correlation Between Baron Emerging and Henderson Global
Can any of the company-specific risk be diversified away by investing in both Baron Emerging and Henderson Global 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 Henderson Global 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 Henderson Global Equity, you can compare the effects of market volatilities on Baron Emerging and Henderson Global 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 Henderson Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Emerging and Henderson Global.
Diversification Opportunities for Baron Emerging and Henderson Global
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baron and Henderson is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Baron Emerging Markets and Henderson Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henderson Global Equity 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 Henderson Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henderson Global Equity has no effect on the direction of Baron Emerging i.e., Baron Emerging and Henderson Global go up and down completely randomly.
Pair Corralation between Baron Emerging and Henderson Global
Assuming the 90 days horizon Baron Emerging is expected to generate 1.04 times less return on investment than Henderson Global. In addition to that, Baron Emerging is 1.31 times more volatile than Henderson Global Equity. It trades about 0.04 of its total potential returns per unit of risk. Henderson Global Equity is currently generating about 0.06 per unit of volatility. If you would invest 523.00 in Henderson Global Equity on September 5, 2024 and sell it today you would earn a total of 104.00 from holding Henderson Global Equity or generate 19.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Emerging Markets vs. Henderson Global Equity
Performance |
| Timeline |
| Baron Emerging Markets |
| Henderson Global Equity |
Baron Emerging and Henderson Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Emerging and Henderson Global
The main advantage of trading using opposite Baron Emerging and Henderson Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Emerging position performs unexpectedly, Henderson Global 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 Henderson Global will offset losses from the drop in Henderson Global'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 |
| Henderson Global vs. Henderson Global Equity | Henderson Global vs. Thornburg Investment Income | Henderson Global vs. Henderson European Focus |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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