Correlation Between Baron Growth and Baron Asset
Can any of the company-specific risk be diversified away by investing in both Baron Growth and Baron Asset 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 Growth and Baron Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Growth Fund and Baron Asset Fund, you can compare the effects of market volatilities on Baron Growth and Baron Asset 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 Growth with a short position of Baron Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Growth and Baron Asset.
Diversification Opportunities for Baron Growth and Baron Asset
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Baron and Baron is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Baron Growth Fund and Baron Asset Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Asset Fund and Baron Growth 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 Growth Fund are associated (or correlated) with Baron Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Asset Fund has no effect on the direction of Baron Growth i.e., Baron Growth and Baron Asset go up and down completely randomly.
Pair Corralation between Baron Growth and Baron Asset
Assuming the 90 days horizon Baron Growth Fund is expected to under-perform the Baron Asset. But the mutual fund apears to be less risky and, when comparing its historical volatility, Baron Growth Fund is 1.16 times less risky than Baron Asset. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Baron Asset Fund is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 9,939 in Baron Asset Fund on November 3, 2024 and sell it today you would lose (326.00) from holding Baron Asset Fund or give up 3.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Growth Fund vs. Baron Asset Fund
Performance |
| Timeline |
| Baron Growth |
| Baron Asset Fund |
Baron Growth and Baron Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Growth and Baron Asset
The main advantage of trading using opposite Baron Growth and Baron Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Growth position performs unexpectedly, Baron Asset 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 Asset will offset losses from the drop in Baron Asset's long position.| Baron Growth vs. Baron Asset Fund | Baron Growth vs. Baron Small Cap | Baron Growth vs. Baron Partners Fund | Baron Growth vs. Fidelity Diversified International |
| Baron Asset vs. Baron Growth Fund | Baron Asset vs. Baron Small Cap | Baron Asset vs. Janus Global Research | Baron Asset vs. Baron Opportunity 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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