Correlation Between Baron Health and Enhanced Fixed
Can any of the company-specific risk be diversified away by investing in both Baron Health and Enhanced Fixed 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 Health and Enhanced Fixed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Health Care and Enhanced Fixed Income, you can compare the effects of market volatilities on Baron Health and Enhanced Fixed 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 Health with a short position of Enhanced Fixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and Enhanced Fixed.
Diversification Opportunities for Baron Health and Enhanced Fixed
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Baron and Enhanced is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care and Enhanced Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enhanced Fixed Income and Baron Health 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 Health Care are associated (or correlated) with Enhanced Fixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enhanced Fixed Income has no effect on the direction of Baron Health i.e., Baron Health and Enhanced Fixed go up and down completely randomly.
Pair Corralation between Baron Health and Enhanced Fixed
Assuming the 90 days horizon Baron Health Care is expected to generate 2.05 times more return on investment than Enhanced Fixed. However, Baron Health is 2.05 times more volatile than Enhanced Fixed Income. It trades about 0.04 of its potential returns per unit of risk. Enhanced Fixed Income is currently generating about 0.06 per unit of risk. If you would invest 1,748 in Baron Health Care on October 25, 2024 and sell it today you would earn a total of 284.00 from holding Baron Health Care or generate 16.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Health Care vs. Enhanced Fixed Income
Performance |
| Timeline |
| Baron Health Care |
| Enhanced Fixed Income |
Baron Health and Enhanced Fixed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Health and Enhanced Fixed
The main advantage of trading using opposite Baron Health and Enhanced Fixed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health position performs unexpectedly, Enhanced Fixed 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 Enhanced Fixed will offset losses from the drop in Enhanced Fixed's long position.| Baron Health vs. T Rowe Price | Baron Health vs. Intermediate Term Tax Free Bond | Baron Health vs. Ab Global Bond | Baron Health vs. Old Westbury Municipal |
| Enhanced Fixed vs. Short Term Government Fund | Enhanced Fixed vs. Virtus Seix Government | Enhanced Fixed vs. Schwab Government Money | Enhanced Fixed vs. Davis Government Bond |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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