Correlation Between Baron Focused and Baron Opportunity
Can any of the company-specific risk be diversified away by investing in both Baron Focused and Baron Opportunity 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 Opportunity 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 Opportunity Fund, you can compare the effects of market volatilities on Baron Focused and Baron Opportunity 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 Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Focused and Baron Opportunity.
Diversification Opportunities for Baron Focused and Baron Opportunity
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Baron and Baron is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Baron Focused Growth and Baron Opportunity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Opportunity 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 Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Opportunity has no effect on the direction of Baron Focused i.e., Baron Focused and Baron Opportunity go up and down completely randomly.
Pair Corralation between Baron Focused and Baron Opportunity
Assuming the 90 days horizon Baron Focused Growth is expected to generate 0.77 times more return on investment than Baron Opportunity. However, Baron Focused Growth is 1.3 times less risky than Baron Opportunity. It trades about 0.26 of its potential returns per unit of risk. Baron Opportunity Fund is currently generating about 0.19 per unit of risk. If you would invest 3,894 in Baron Focused Growth on August 29, 2024 and sell it today you would earn a total of 670.00 from holding Baron Focused Growth or generate 17.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Focused Growth vs. Baron Opportunity Fund
Performance |
| Timeline |
| Baron Focused Growth |
| Baron Opportunity |
Baron Focused and Baron Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Focused and Baron Opportunity
The main advantage of trading using opposite Baron Focused and Baron Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Focused position performs unexpectedly, Baron Opportunity 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 Opportunity will offset losses from the drop in Baron Opportunity's long position.| 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 |
| Baron Opportunity vs. Baron Partners Fund | Baron Opportunity vs. Baron Global Advantage | Baron Opportunity vs. Baron Focused Growth | Baron Opportunity vs. Baron Discovery Fund |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |