Correlation Between Baron Health and Access Capital
Can any of the company-specific risk be diversified away by investing in both Baron Health and Access Capital 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 Access Capital 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 Access Capital Munity, you can compare the effects of market volatilities on Baron Health and Access Capital 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 Access Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and Access Capital.
Diversification Opportunities for Baron Health and Access Capital
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baron and Access is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care and Access Capital Munity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Access Capital Munity 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 Access Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Access Capital Munity has no effect on the direction of Baron Health i.e., Baron Health and Access Capital go up and down completely randomly.
Pair Corralation between Baron Health and Access Capital
Assuming the 90 days horizon Baron Health Care is expected to generate 2.37 times more return on investment than Access Capital. However, Baron Health is 2.37 times more volatile than Access Capital Munity. It trades about -0.02 of its potential returns per unit of risk. Access Capital Munity is currently generating about -0.12 per unit of risk. If you would invest 2,088 in Baron Health Care on September 3, 2024 and sell it today you would lose (17.00) from holding Baron Health Care or give up 0.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Health Care vs. Access Capital Munity
Performance |
| Timeline |
| Baron Health Care |
| Access Capital Munity |
Baron Health and Access Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Health and Access Capital
The main advantage of trading using opposite Baron Health and Access Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health position performs unexpectedly, Access Capital 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 Access Capital will offset losses from the drop in Access Capital's long position.| Baron Health vs. Vanguard Health Care | Baron Health vs. Vanguard Health Care | Baron Health vs. T Rowe Price | Baron Health vs. T Rowe Price |
| Access Capital vs. Vanguard Gnma Fund | Access Capital vs. Vanguard Intermediate Term Government | Access Capital vs. Us Government Securities | Access Capital vs. Us Government Securities |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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