Correlation Between Baron Emerging and Amg Frontier
Can any of the company-specific risk be diversified away by investing in both Baron Emerging and Amg Frontier 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 Amg Frontier 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 Amg Frontier Small, you can compare the effects of market volatilities on Baron Emerging and Amg Frontier 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 Amg Frontier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Emerging and Amg Frontier.
Diversification Opportunities for Baron Emerging and Amg Frontier
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Baron and Amg is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Baron Emerging Markets and Amg Frontier Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Frontier Small 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 Amg Frontier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Frontier Small has no effect on the direction of Baron Emerging i.e., Baron Emerging and Amg Frontier go up and down completely randomly.
Pair Corralation between Baron Emerging and Amg Frontier
Assuming the 90 days horizon Baron Emerging Markets is expected to under-perform the Amg Frontier. But the mutual fund apears to be less risky and, when comparing its historical volatility, Baron Emerging Markets is 1.85 times less risky than Amg Frontier. The mutual fund trades about -0.18 of its potential returns per unit of risk. The Amg Frontier Small is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,042 in Amg Frontier Small on August 31, 2024 and sell it today you would earn a total of 75.00 from holding Amg Frontier Small or generate 7.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Baron Emerging Markets vs. Amg Frontier Small
Performance |
| Timeline |
| Baron Emerging Markets |
| Amg Frontier Small |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Baron Emerging and Amg Frontier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Emerging and Amg Frontier
The main advantage of trading using opposite Baron Emerging and Amg Frontier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Emerging position performs unexpectedly, Amg Frontier 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 Amg Frontier will offset losses from the drop in Amg Frontier's long position.| Baron Emerging vs. Eaton Vance Income | Baron Emerging vs. Baird Aggregate Bond | Baron Emerging vs. Champlain Small | Baron Emerging vs. Mfs Emerging Markets |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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