Correlation Between Baron Health and Invesco High
Can any of the company-specific risk be diversified away by investing in both Baron Health and Invesco High 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 Invesco High 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 Invesco High Yield, you can compare the effects of market volatilities on Baron Health and Invesco High 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 Invesco High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and Invesco High.
Diversification Opportunities for Baron Health and Invesco High
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Baron and Invesco is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care and Invesco High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco High Yield 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 Invesco High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco High Yield has no effect on the direction of Baron Health i.e., Baron Health and Invesco High go up and down completely randomly.
Pair Corralation between Baron Health and Invesco High
Assuming the 90 days horizon Baron Health Care is expected to generate 2.41 times more return on investment than Invesco High. However, Baron Health is 2.41 times more volatile than Invesco High Yield. It trades about 0.08 of its potential returns per unit of risk. Invesco High Yield is currently generating about 0.16 per unit of risk. If you would invest 1,948 in Baron Health Care on October 23, 2024 and sell it today you would earn a total of 20.00 from holding Baron Health Care or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Health Care vs. Invesco High Yield
Performance |
| Timeline |
| Baron Health Care |
| Invesco High Yield |
Baron Health and Invesco High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Health and Invesco High
The main advantage of trading using opposite Baron Health and Invesco High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health position performs unexpectedly, Invesco High 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 Invesco High will offset losses from the drop in Invesco High's long position.| Baron Health vs. Qs Large Cap | Baron Health vs. Touchstone Large Cap | Baron Health vs. Tax Managed Large Cap | Baron Health vs. Qs Large Cap |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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