Correlation Between Baron Health and Dreyfus International
Can any of the company-specific risk be diversified away by investing in both Baron Health and Dreyfus International 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 Dreyfus International 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 Dreyfus International Stock, you can compare the effects of market volatilities on Baron Health and Dreyfus International 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 Dreyfus International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and Dreyfus International.
Diversification Opportunities for Baron Health and Dreyfus International
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Baron and Dreyfus is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care and Dreyfus International Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus International 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 Dreyfus International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus International has no effect on the direction of Baron Health i.e., Baron Health and Dreyfus International go up and down completely randomly.
Pair Corralation between Baron Health and Dreyfus International
Assuming the 90 days horizon Baron Health Care is expected to under-perform the Dreyfus International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Baron Health Care is 1.09 times less risky than Dreyfus International. The mutual fund trades about -0.21 of its potential returns per unit of risk. The Dreyfus International Stock is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,993 in Dreyfus International Stock on November 27, 2024 and sell it today you would earn a total of 62.00 from holding Dreyfus International Stock or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Health Care vs. Dreyfus International Stock
Performance |
| Timeline |
| Baron Health Care |
| Dreyfus International |
Baron Health and Dreyfus International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Health and Dreyfus International
The main advantage of trading using opposite Baron Health and Dreyfus International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health position performs unexpectedly, Dreyfus International 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 Dreyfus International will offset losses from the drop in Dreyfus International's long position.| Baron Health vs. Diversified Bond Fund | Baron Health vs. Federated Hermes Conservative | Baron Health vs. Massmutual Premier Diversified | Baron Health vs. Tiaa Cref Lifestyle Conservative |
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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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