Correlation Between Baron Health and Locorr Market
Can any of the company-specific risk be diversified away by investing in both Baron Health and Locorr Market 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 Locorr Market 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 Locorr Market Trend, you can compare the effects of market volatilities on Baron Health and Locorr Market 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 Locorr Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and Locorr Market.
Diversification Opportunities for Baron Health and Locorr Market
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Baron and Locorr is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care and Locorr Market Trend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Market Trend 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 Locorr Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Market Trend has no effect on the direction of Baron Health i.e., Baron Health and Locorr Market go up and down completely randomly.
Pair Corralation between Baron Health and Locorr Market
Assuming the 90 days horizon Baron Health Care is expected to under-perform the Locorr Market. But the mutual fund apears to be less risky and, when comparing its historical volatility, Baron Health Care is 1.33 times less risky than Locorr Market. The mutual fund trades about -0.17 of its potential returns per unit of risk. The Locorr Market Trend is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 1,068 in Locorr Market Trend on September 13, 2024 and sell it today you would lose (33.00) from holding Locorr Market Trend or give up 3.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Health Care vs. Locorr Market Trend
Performance |
| Timeline |
| Baron Health Care |
| Locorr Market Trend |
Baron Health and Locorr Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Health and Locorr Market
The main advantage of trading using opposite Baron Health and Locorr Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health position performs unexpectedly, Locorr Market 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 Locorr Market will offset losses from the drop in Locorr Market's long position.| Baron Health vs. Guidemark Large Cap | Baron Health vs. Old Westbury Large | Baron Health vs. Alternative Asset Allocation | Baron Health vs. Pace Large Growth |
| Locorr Market vs. Ab Government Exchange | Locorr Market vs. Hsbc Treasury Money | Locorr Market vs. The Gabelli Money | Locorr Market vs. Franklin Government Money |
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 Stocks Directory module to find actively traded stocks across global markets.
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