Correlation Between Baron Fifth and Touchstone Sands
Can any of the company-specific risk be diversified away by investing in both Baron Fifth and Touchstone Sands 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 Touchstone Sands 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 Touchstone Sands Capital, you can compare the effects of market volatilities on Baron Fifth and Touchstone Sands 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 Touchstone Sands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Fifth and Touchstone Sands.
Diversification Opportunities for Baron Fifth and Touchstone Sands
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Baron and Touchstone is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Baron Fifth Avenue and Touchstone Sands Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Sands Capital 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 Touchstone Sands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Sands Capital has no effect on the direction of Baron Fifth i.e., Baron Fifth and Touchstone Sands go up and down completely randomly.
Pair Corralation between Baron Fifth and Touchstone Sands
Assuming the 90 days horizon Baron Fifth Avenue is expected to generate 1.1 times more return on investment than Touchstone Sands. However, Baron Fifth is 1.1 times more volatile than Touchstone Sands Capital. It trades about 0.12 of its potential returns per unit of risk. Touchstone Sands Capital is currently generating about 0.11 per unit of risk. If you would invest 2,739 in Baron Fifth Avenue on September 12, 2024 and sell it today you would earn a total of 3,527 from holding Baron Fifth Avenue or generate 128.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Fifth Avenue vs. Touchstone Sands Capital
Performance |
| Timeline |
| Baron Fifth Avenue |
| Touchstone Sands Capital |
Baron Fifth and Touchstone Sands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Fifth and Touchstone Sands
The main advantage of trading using opposite Baron Fifth and Touchstone Sands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Fifth position performs unexpectedly, Touchstone Sands 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 Touchstone Sands will offset losses from the drop in Touchstone Sands' 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 |
| Touchstone Sands vs. American Funds The | Touchstone Sands vs. American Funds The | Touchstone Sands vs. Growth Fund Of | Touchstone Sands vs. Growth Fund Of |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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