Correlation Between Baron Fifth and Baron Health
Can any of the company-specific risk be diversified away by investing in both Baron Fifth and Baron Health 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 Fifth and Baron Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Fifth Avenue and Baron Health Care, you can compare the effects of market volatilities on Baron Fifth and Baron Health 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 Fifth with a short position of Baron Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Fifth and Baron Health.
Diversification Opportunities for Baron Fifth and Baron Health
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Baron and Baron is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Baron Fifth Avenue and Baron Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Health Care and Baron Fifth 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 Fifth Avenue are associated (or correlated) with Baron Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Health Care has no effect on the direction of Baron Fifth i.e., Baron Fifth and Baron Health go up and down completely randomly.
Pair Corralation between Baron Fifth and Baron Health
Assuming the 90 days horizon Baron Fifth Avenue is expected to generate 1.87 times more return on investment than Baron Health. However, Baron Fifth is 1.87 times more volatile than Baron Health Care. It trades about 0.1 of its potential returns per unit of risk. Baron Health Care is currently generating about 0.03 per unit of risk. If you would invest 2,858 in Baron Fifth Avenue on August 28, 2024 and sell it today you would earn a total of 3,164 from holding Baron Fifth Avenue or generate 110.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Fifth Avenue vs. Baron Health Care
Performance |
| Timeline |
| Baron Fifth Avenue |
| Baron Health Care |
Baron Fifth and Baron Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Fifth and Baron Health
The main advantage of trading using opposite Baron Fifth and Baron Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Fifth position performs unexpectedly, Baron Health 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 Health will offset losses from the drop in Baron Health's long position.| Baron Fifth vs. Baron Partners Fund | Baron Fifth vs. Baron Discovery Fund | Baron Fifth vs. Baron Opportunity Fund | Baron Fifth vs. Baron Global Advantage |
| Baron Health vs. Alger Health Sciences | Baron Health vs. Baillie Gifford Health | Baron Health vs. Allianzgi Health Sciences | Baron Health vs. Fidelity Advisor Health |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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