Correlation Between Baron Growth and Fidelity Growth
Can any of the company-specific risk be diversified away by investing in both Baron Growth and Fidelity Growth 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 Fidelity Growth 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 Fidelity Growth Strategies, you can compare the effects of market volatilities on Baron Growth and Fidelity Growth 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 Fidelity Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Growth and Fidelity Growth.
Diversification Opportunities for Baron Growth and Fidelity Growth
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baron and Fidelity is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Baron Growth Fund and Fidelity Growth Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Growth Stra 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 Fidelity Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Growth Stra has no effect on the direction of Baron Growth i.e., Baron Growth and Fidelity Growth go up and down completely randomly.
Pair Corralation between Baron Growth and Fidelity Growth
Assuming the 90 days horizon Baron Growth is expected to generate 3.51 times less return on investment than Fidelity Growth. But when comparing it to its historical volatility, Baron Growth Fund is 1.66 times less risky than Fidelity Growth. It trades about 0.02 of its potential returns per unit of risk. Fidelity Growth Strategies is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 7,593 in Fidelity Growth Strategies on September 12, 2024 and sell it today you would earn a total of 56.00 from holding Fidelity Growth Strategies or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Growth Fund vs. Fidelity Growth Strategies
Performance |
| Timeline |
| Baron Growth |
| Fidelity Growth Stra |
Baron Growth and Fidelity Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Growth and Fidelity Growth
The main advantage of trading using opposite Baron Growth and Fidelity Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Growth position performs unexpectedly, Fidelity Growth 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 Fidelity Growth will offset losses from the drop in Fidelity Growth's long position.| Baron Growth vs. Baron Small Cap | Baron Growth vs. Janus Global Research | Baron Growth vs. Baron Opportunity Fund | Baron Growth vs. Oakmark Fund Investor |
| Fidelity Growth vs. Baron Growth Fund | Fidelity Growth vs. Baron Small Cap | Fidelity Growth vs. Janus Global Research | Fidelity Growth 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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