Correlation Between Baron Growth and Nasdaq-100 Fund
Can any of the company-specific risk be diversified away by investing in both Baron Growth and Nasdaq-100 Fund 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 Nasdaq-100 Fund 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 Nasdaq 100 Fund Investor, you can compare the effects of market volatilities on Baron Growth and Nasdaq-100 Fund 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 Nasdaq-100 Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Growth and Nasdaq-100 Fund.
Diversification Opportunities for Baron Growth and Nasdaq-100 Fund
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baron and NASDAQ-100 is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Baron Growth Fund and Nasdaq 100 Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 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 Nasdaq-100 Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 Fund has no effect on the direction of Baron Growth i.e., Baron Growth and Nasdaq-100 Fund go up and down completely randomly.
Pair Corralation between Baron Growth and Nasdaq-100 Fund
Assuming the 90 days horizon Baron Growth Fund is expected to generate 0.84 times more return on investment than Nasdaq-100 Fund. However, Baron Growth Fund is 1.19 times less risky than Nasdaq-100 Fund. It trades about 0.18 of its potential returns per unit of risk. Nasdaq 100 Fund Investor is currently generating about 0.09 per unit of risk. If you would invest 10,206 in Baron Growth Fund on August 28, 2024 and sell it today you would earn a total of 400.00 from holding Baron Growth Fund or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Baron Growth Fund vs. Nasdaq 100 Fund Investor
Performance |
| Timeline |
| Baron Growth |
| Nasdaq 100 Fund |
Baron Growth and Nasdaq-100 Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Growth and Nasdaq-100 Fund
The main advantage of trading using opposite Baron Growth and Nasdaq-100 Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Growth position performs unexpectedly, Nasdaq-100 Fund 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 Nasdaq-100 Fund will offset losses from the drop in Nasdaq-100 Fund's long position.| Baron Growth vs. Baron Real Estate | Baron Growth vs. Baron Real Estate | Baron Growth vs. Baron Real Estate | Baron Growth vs. Baron Small Cap |
| Nasdaq-100 Fund vs. Fidelity Advisor Gold | Nasdaq-100 Fund vs. Great West Goldman Sachs | Nasdaq-100 Fund vs. Short Precious Metals | Nasdaq-100 Fund vs. Franklin Gold Precious |
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 Positions Ratings module to 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.
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