Correlation Between Baron Health and Federated Bond
Can any of the company-specific risk be diversified away by investing in both Baron Health and Federated Bond 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 Federated Bond 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 Federated Bond Fund, you can compare the effects of market volatilities on Baron Health and Federated Bond 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 Federated Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and Federated Bond.
Diversification Opportunities for Baron Health and Federated Bond
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baron and Federated is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care and Federated Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Bond 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 Federated Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Bond has no effect on the direction of Baron Health i.e., Baron Health and Federated Bond go up and down completely randomly.
Pair Corralation between Baron Health and Federated Bond
Assuming the 90 days horizon Baron Health Care is expected to generate 2.66 times more return on investment than Federated Bond. However, Baron Health is 2.66 times more volatile than Federated Bond Fund. It trades about 0.05 of its potential returns per unit of risk. Federated Bond Fund is currently generating about 0.09 per unit of risk. If you would invest 1,787 in Baron Health Care on September 14, 2024 and sell it today you would earn a total of 207.00 from holding Baron Health Care or generate 11.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Health Care vs. Federated Bond Fund
Performance |
| Timeline |
| Baron Health Care |
| Federated Bond |
Baron Health and Federated Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Health and Federated Bond
The main advantage of trading using opposite Baron Health and Federated Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health position performs unexpectedly, Federated Bond 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 Federated Bond will offset losses from the drop in Federated Bond's long position.| Baron Health vs. Ab Bond Inflation | Baron Health vs. Goldman Sachs Inflation | Baron Health vs. Ab Bond Inflation | Baron Health vs. Ab Bond Inflation |
| Federated Bond vs. The Gabelli Healthcare | Federated Bond vs. Baron Health Care | Federated Bond vs. Lord Abbett Health | Federated Bond vs. Highland Longshort Healthcare |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |