Correlation Between Baron Emerging and Sitka Gold
Can any of the company-specific risk be diversified away by investing in both Baron Emerging and Sitka Gold 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 Sitka Gold 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 Sitka Gold Corp, you can compare the effects of market volatilities on Baron Emerging and Sitka Gold 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 Sitka Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Emerging and Sitka Gold.
Diversification Opportunities for Baron Emerging and Sitka Gold
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baron and Sitka is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Baron Emerging Markets and Sitka Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sitka Gold Corp 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 Sitka Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sitka Gold Corp has no effect on the direction of Baron Emerging i.e., Baron Emerging and Sitka Gold go up and down completely randomly.
Pair Corralation between Baron Emerging and Sitka Gold
Assuming the 90 days horizon Baron Emerging is expected to generate 16.07 times less return on investment than Sitka Gold. But when comparing it to its historical volatility, Baron Emerging Markets is 7.69 times less risky than Sitka Gold. It trades about 0.03 of its potential returns per unit of risk. Sitka Gold Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 9.51 in Sitka Gold Corp on August 31, 2024 and sell it today you would earn a total of 20.49 from holding Sitka Gold Corp or generate 215.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Baron Emerging Markets vs. Sitka Gold Corp
Performance |
| Timeline |
| Baron Emerging Markets |
| Sitka Gold Corp |
Baron Emerging and Sitka Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Emerging and Sitka Gold
The main advantage of trading using opposite Baron Emerging and Sitka Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Emerging position performs unexpectedly, Sitka Gold 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 Sitka Gold will offset losses from the drop in Sitka Gold'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 |
| Sitka Gold vs. Aurion Resources | Sitka Gold vs. Rio2 Limited | Sitka Gold vs. Palamina Corp | Sitka Gold vs. BTU Metals Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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