Correlation Between Baron Health and Pro Blend
Can any of the company-specific risk be diversified away by investing in both Baron Health and Pro Blend 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 Pro Blend 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 Pro Blend Maximum Term, you can compare the effects of market volatilities on Baron Health and Pro Blend 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 Pro Blend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and Pro Blend.
Diversification Opportunities for Baron Health and Pro Blend
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baron and Pro is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care and Pro Blend Maximum Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro Blend Maximum 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 Pro Blend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pro Blend Maximum has no effect on the direction of Baron Health i.e., Baron Health and Pro Blend go up and down completely randomly.
Pair Corralation between Baron Health and Pro Blend
Assuming the 90 days horizon Baron Health Care is expected to under-perform the Pro Blend. In addition to that, Baron Health is 1.69 times more volatile than Pro Blend Maximum Term. It trades about -0.17 of its total potential returns per unit of risk. Pro Blend Maximum Term is currently generating about 0.12 per unit of volatility. If you would invest 2,720 in Pro Blend Maximum Term on September 13, 2024 and sell it today you would earn a total of 38.00 from holding Pro Blend Maximum Term or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Health Care vs. Pro Blend Maximum Term
Performance |
| Timeline |
| Baron Health Care |
| Pro Blend Maximum |
Baron Health and Pro Blend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Health and Pro Blend
The main advantage of trading using opposite Baron Health and Pro Blend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health position performs unexpectedly, Pro Blend 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 Pro Blend will offset losses from the drop in Pro Blend'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 |
| Pro Blend vs. Western Asset Inflation | Pro Blend vs. Arrow Managed Futures | Pro Blend vs. Aqr Managed Futures | Pro Blend vs. American Funds Inflation |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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