Correlation Between Baron Health and Qs International
Can any of the company-specific risk be diversified away by investing in both Baron Health and Qs 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 Qs 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 Qs International Equity, you can compare the effects of market volatilities on Baron Health and Qs 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 Qs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and Qs International.
Diversification Opportunities for Baron Health and Qs International
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baron and LIESX is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care and Qs International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qs International Equity 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 Qs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qs International Equity has no effect on the direction of Baron Health i.e., Baron Health and Qs International go up and down completely randomly.
Pair Corralation between Baron Health and Qs International
Assuming the 90 days horizon Baron Health is expected to generate 1.26 times less return on investment than Qs International. In addition to that, Baron Health is 1.31 times more volatile than Qs International Equity. It trades about 0.04 of its total potential returns per unit of risk. Qs International Equity is currently generating about 0.07 per unit of volatility. If you would invest 1,878 in Qs International Equity on September 5, 2024 and sell it today you would earn a total of 21.00 from holding Qs International Equity or generate 1.12% 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. Qs International Equity
Performance |
| Timeline |
| Baron Health Care |
| Qs International Equity |
Baron Health and Qs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Health and Qs International
The main advantage of trading using opposite Baron Health and Qs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health position performs unexpectedly, Qs 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 Qs International will offset losses from the drop in Qs International's long position.| Baron Health vs. Baron Discovery Fund | Baron Health vs. Baron Global Advantage | Baron Health vs. Baron Real Estate | Baron Health vs. Baron Focused Growth |
| Qs International vs. Clearbridge Aggressive Growth | Qs International vs. Clearbridge Small Cap | Qs International vs. Qs International Equity | Qs International vs. Clearbridge Appreciation 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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