Correlation Between Baron Health and Total Return
Can any of the company-specific risk be diversified away by investing in both Baron Health and Total Return 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 Total Return 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 Total Return Fund, you can compare the effects of market volatilities on Baron Health and Total Return 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 Total Return. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and Total Return.
Diversification Opportunities for Baron Health and Total Return
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baron and Total is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care and Total Return Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Return 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 Total Return. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Return has no effect on the direction of Baron Health i.e., Baron Health and Total Return go up and down completely randomly.
Pair Corralation between Baron Health and Total Return
Assuming the 90 days horizon Baron Health Care is expected to under-perform the Total Return. In addition to that, Baron Health is 3.25 times more volatile than Total Return Fund. It trades about -0.13 of its total potential returns per unit of risk. Total Return Fund is currently generating about -0.1 per unit of volatility. If you would invest 859.00 in Total Return Fund on August 24, 2024 and sell it today you would lose (6.00) from holding Total Return Fund or give up 0.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Baron Health Care vs. Total Return Fund
Performance |
| Timeline |
| Baron Health Care |
| Total Return |
Baron Health and Total Return Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Health and Total Return
The main advantage of trading using opposite Baron Health and Total Return positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health position performs unexpectedly, Total Return 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 Total Return will offset losses from the drop in Total Return's long position.| Baron Health vs. T Rowe Price | Baron Health vs. Nuveen All American Municipal | Baron Health vs. Morningstar Defensive Bond | Baron Health vs. Multisector Bond Sma |
| Total Return vs. Baron Health Care | Total Return vs. Highland Longshort Healthcare | Total Return vs. Invesco Global Health | Total Return vs. Eventide Healthcare Life |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |