Correlation Between Baron Focused and Baron Emerging
Can any of the company-specific risk be diversified away by investing in both Baron Focused and Baron Emerging 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 Focused and Baron Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Focused Growth and Baron Emerging Markets, you can compare the effects of market volatilities on Baron Focused and Baron Emerging 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 Focused with a short position of Baron Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Focused and Baron Emerging.
Diversification Opportunities for Baron Focused and Baron Emerging
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Baron and Baron is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Baron Focused Growth and Baron Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Emerging Markets and Baron Focused 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 Focused Growth are associated (or correlated) with Baron Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Emerging Markets has no effect on the direction of Baron Focused i.e., Baron Focused and Baron Emerging go up and down completely randomly.
Pair Corralation between Baron Focused and Baron Emerging
Assuming the 90 days horizon Baron Focused Growth is expected to generate 1.2 times more return on investment than Baron Emerging. However, Baron Focused is 1.2 times more volatile than Baron Emerging Markets. It trades about 0.1 of its potential returns per unit of risk. Baron Emerging Markets is currently generating about 0.05 per unit of risk. If you would invest 3,059 in Baron Focused Growth on November 1, 2024 and sell it today you would earn a total of 1,877 from holding Baron Focused Growth or generate 61.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Focused Growth vs. Baron Emerging Markets
Performance |
| Timeline |
| Baron Focused Growth |
| Baron Emerging Markets |
Baron Focused and Baron Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Focused and Baron Emerging
The main advantage of trading using opposite Baron Focused and Baron Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Focused position performs unexpectedly, Baron Emerging 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 Emerging will offset losses from the drop in Baron Emerging's long position.| Baron Focused vs. Saat Market Growth | Baron Focused vs. Sp Midcap Index | Baron Focused vs. Ashmore Emerging Markets | Baron Focused vs. Locorr Market Trend |
| Baron Emerging vs. Eaton Vance Income | Baron Emerging vs. Baird Aggregate Bond | Baron Emerging vs. Champlain Small | Baron Emerging vs. Mfs Emerging Markets |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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