Correlation Between Baron Global and Hennessy Japan
Can any of the company-specific risk be diversified away by investing in both Baron Global and Hennessy Japan 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 Global and Hennessy Japan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Global Advantage and Hennessy Japan Fund, you can compare the effects of market volatilities on Baron Global and Hennessy Japan 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 Global with a short position of Hennessy Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Global and Hennessy Japan.
Diversification Opportunities for Baron Global and Hennessy Japan
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Baron and HENNESSY is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Baron Global Advantage and Hennessy Japan Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Japan and Baron Global 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 Global Advantage are associated (or correlated) with Hennessy Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Japan has no effect on the direction of Baron Global i.e., Baron Global and Hennessy Japan go up and down completely randomly.
Pair Corralation between Baron Global and Hennessy Japan
Assuming the 90 days horizon Baron Global Advantage is expected to generate 1.14 times more return on investment than Hennessy Japan. However, Baron Global is 1.14 times more volatile than Hennessy Japan Fund. It trades about 0.07 of its potential returns per unit of risk. Hennessy Japan Fund is currently generating about 0.04 per unit of risk. If you would invest 2,584 in Baron Global Advantage on November 28, 2024 and sell it today you would earn a total of 1,372 from holding Baron Global Advantage or generate 53.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Global Advantage vs. Hennessy Japan Fund
Performance |
| Timeline |
| Baron Global Advantage |
| Hennessy Japan |
Baron Global and Hennessy Japan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Global and Hennessy Japan
The main advantage of trading using opposite Baron Global and Hennessy Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Global position performs unexpectedly, Hennessy Japan 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 Hennessy Japan will offset losses from the drop in Hennessy Japan's long position.| Baron Global vs. Baron Opportunity Fund | Baron Global vs. Morgan Stanley Multi | Baron Global vs. Baron Focused Growth | Baron Global vs. Mid Cap Growth |
| Hennessy Japan vs. Hennessy Japan Small | Hennessy Japan vs. Hennessy Japan Fund | Hennessy Japan vs. Matthews Japan Fund | Hennessy Japan vs. Matthews Japan 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Positions Ratings 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 | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |