Correlation Between Baron Health and Aqr Large
Can any of the company-specific risk be diversified away by investing in both Baron Health and Aqr Large 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 Aqr Large 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 Aqr Large Cap, you can compare the effects of market volatilities on Baron Health and Aqr Large 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 Aqr Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and Aqr Large.
Diversification Opportunities for Baron Health and Aqr Large
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baron and Aqr is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care and Aqr Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Large Cap 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 Aqr Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Large Cap has no effect on the direction of Baron Health i.e., Baron Health and Aqr Large go up and down completely randomly.
Pair Corralation between Baron Health and Aqr Large
Assuming the 90 days horizon Baron Health is expected to generate 2.43 times less return on investment than Aqr Large. But when comparing it to its historical volatility, Baron Health Care is 1.35 times less risky than Aqr Large. It trades about 0.04 of its potential returns per unit of risk. Aqr Large Cap is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,917 in Aqr Large Cap on August 31, 2024 and sell it today you would earn a total of 664.00 from holding Aqr Large Cap or generate 34.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Health Care vs. Aqr Large Cap
Performance |
| Timeline |
| Baron Health Care |
| Aqr Large Cap |
Baron Health and Aqr Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Health and Aqr Large
The main advantage of trading using opposite Baron Health and Aqr Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health position performs unexpectedly, Aqr Large 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 Aqr Large will offset losses from the drop in Aqr Large's long position.| Baron Health vs. Vy T Rowe | Baron Health vs. Eaton Vance Atlanta | Baron Health vs. Blackrock Health Sciences | Baron Health vs. Blackrock Health Sciences |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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