Correlation Between Baron Health and Voya Midcap
Can any of the company-specific risk be diversified away by investing in both Baron Health and Voya Midcap 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 Voya Midcap 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 Voya Midcap Opportunities, you can compare the effects of market volatilities on Baron Health and Voya Midcap 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 Voya Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and Voya Midcap.
Diversification Opportunities for Baron Health and Voya Midcap
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Baron and Voya is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care and Voya Midcap Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Midcap Opportunities 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 Voya Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Midcap Opportunities has no effect on the direction of Baron Health i.e., Baron Health and Voya Midcap go up and down completely randomly.
Pair Corralation between Baron Health and Voya Midcap
Assuming the 90 days horizon Baron Health is expected to generate 1.16 times less return on investment than Voya Midcap. But when comparing it to its historical volatility, Baron Health Care is 1.49 times less risky than Voya Midcap. It trades about 0.3 of its potential returns per unit of risk. Voya Midcap Opportunities is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 373.00 in Voya Midcap Opportunities on November 3, 2024 and sell it today you would earn a total of 22.00 from holding Voya Midcap Opportunities or generate 5.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Baron Health Care vs. Voya Midcap Opportunities
Performance |
| Timeline |
| Baron Health Care |
| Voya Midcap Opportunities |
Baron Health and Voya Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Health and Voya Midcap
The main advantage of trading using opposite Baron Health and Voya Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health position performs unexpectedly, Voya Midcap 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 Voya Midcap will offset losses from the drop in Voya Midcap's long position.| Baron Health vs. Chestnut Street Exchange | Baron Health vs. Ab Government Exchange | Baron Health vs. Schwab Government Money | Baron Health vs. Financial Industries Fund |
| Voya Midcap vs. Energy Services Fund | Voya Midcap vs. Thrivent Natural Resources | Voya Midcap vs. Vanguard Energy Index | Voya Midcap vs. World Energy Fund |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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