Correlation Between Baron Health and Calvert Emerging
Can any of the company-specific risk be diversified away by investing in both Baron Health and Calvert Emerging 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 Calvert Emerging 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 Calvert Emerging Markets, you can compare the effects of market volatilities on Baron Health and Calvert Emerging 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 Calvert Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and Calvert Emerging.
Diversification Opportunities for Baron Health and Calvert Emerging
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baron and Calvert is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care and Calvert Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Emerging Markets 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 Calvert Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Emerging Markets has no effect on the direction of Baron Health i.e., Baron Health and Calvert Emerging go up and down completely randomly.
Pair Corralation between Baron Health and Calvert Emerging
Assuming the 90 days horizon Baron Health Care is expected to under-perform the Calvert Emerging. In addition to that, Baron Health is 1.36 times more volatile than Calvert Emerging Markets. It trades about -0.09 of its total potential returns per unit of risk. Calvert Emerging Markets is currently generating about 0.04 per unit of volatility. If you would invest 1,042 in Calvert Emerging Markets on January 10, 2025 and sell it today you would earn a total of 12.00 from holding Calvert Emerging Markets or generate 1.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Health Care vs. Calvert Emerging Markets
Performance |
| Timeline |
| Baron Health Care |
| Calvert Emerging Markets |
Baron Health and Calvert Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Health and Calvert Emerging
The main advantage of trading using opposite Baron Health and Calvert Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health position performs unexpectedly, Calvert Emerging 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 Calvert Emerging will offset losses from the drop in Calvert Emerging's long position.| Baron Health vs. Legg Mason Partners | Baron Health vs. Us Government Plus | Baron Health vs. Short Term Government Fund | Baron Health vs. Morgan Stanley Institutional |
| Calvert Emerging vs. Calvert Developed Market | Calvert Emerging vs. Calvert Developed Market | Calvert Emerging vs. Calvert Short Duration | Calvert Emerging vs. Calvert International Responsible |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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