Correlation Between Baron Health and Clearbridge Large
Can any of the company-specific risk be diversified away by investing in both Baron Health and Clearbridge Large 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 Clearbridge Large 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 Clearbridge Large Cap, you can compare the effects of market volatilities on Baron Health and Clearbridge Large 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 Clearbridge Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and Clearbridge Large.
Diversification Opportunities for Baron Health and Clearbridge Large
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Baron and Clearbridge is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care and Clearbridge Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Large Cap 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 Clearbridge Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Large Cap has no effect on the direction of Baron Health i.e., Baron Health and Clearbridge Large go up and down completely randomly.
Pair Corralation between Baron Health and Clearbridge Large
Assuming the 90 days horizon Baron Health Care is expected to generate 0.61 times more return on investment than Clearbridge Large. However, Baron Health Care is 1.63 times less risky than Clearbridge Large. It trades about -0.12 of its potential returns per unit of risk. Clearbridge Large Cap is currently generating about -0.21 per unit of risk. If you would invest 2,027 in Baron Health Care on October 11, 2024 and sell it today you would lose (46.00) from holding Baron Health Care or give up 2.27% 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. Clearbridge Large Cap
Performance |
| Timeline |
| Baron Health Care |
| Clearbridge Large Cap |
Baron Health and Clearbridge Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Health and Clearbridge Large
The main advantage of trading using opposite Baron Health and Clearbridge Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health position performs unexpectedly, Clearbridge Large 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 Clearbridge Large will offset losses from the drop in Clearbridge Large's long position.| Baron Health vs. Tiaa Cref Real Estate | Baron Health vs. Baron Real Estate | Baron Health vs. Pender Real Estate | Baron Health vs. Redwood Real Estate |
| Clearbridge Large vs. Lord Abbett Health | Clearbridge Large vs. Deutsche Health And | Clearbridge Large vs. Baron Health Care | Clearbridge Large vs. Live Oak Health |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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