Correlation Between Baron Growth and Community Reinvestment
Can any of the company-specific risk be diversified away by investing in both Baron Growth and Community Reinvestment 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 Community Reinvestment 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 Community Reinvestment Act, you can compare the effects of market volatilities on Baron Growth and Community Reinvestment 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 Community Reinvestment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Growth and Community Reinvestment.
Diversification Opportunities for Baron Growth and Community Reinvestment
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baron and Community is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Baron Growth Fund and Community Reinvestment Act in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community Reinvestment 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 Community Reinvestment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community Reinvestment has no effect on the direction of Baron Growth i.e., Baron Growth and Community Reinvestment go up and down completely randomly.
Pair Corralation between Baron Growth and Community Reinvestment
Assuming the 90 days horizon Baron Growth Fund is expected to generate 2.86 times more return on investment than Community Reinvestment. However, Baron Growth is 2.86 times more volatile than Community Reinvestment Act. It trades about 0.35 of its potential returns per unit of risk. Community Reinvestment Act is currently generating about 0.11 per unit of risk. If you would invest 9,958 in Baron Growth Fund on September 1, 2024 and sell it today you would earn a total of 657.00 from holding Baron Growth Fund or generate 6.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Baron Growth Fund vs. Community Reinvestment Act
Performance |
| Timeline |
| Baron Growth |
| Community Reinvestment |
Baron Growth and Community Reinvestment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Growth and Community Reinvestment
The main advantage of trading using opposite Baron Growth and Community Reinvestment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Growth position performs unexpectedly, Community Reinvestment 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 Community Reinvestment will offset losses from the drop in Community Reinvestment'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 |
| Community Reinvestment vs. Palm Valley Capital | Community Reinvestment vs. Mid Cap Value Profund | Community Reinvestment vs. Royce Opportunity Fund | Community Reinvestment vs. Columbia Small Cap |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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