Correlation Between Baron Health and Power Dividend
Can any of the company-specific risk be diversified away by investing in both Baron Health and Power Dividend 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 Power Dividend 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 Power Dividend Index, you can compare the effects of market volatilities on Baron Health and Power Dividend 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 Power Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and Power Dividend.
Diversification Opportunities for Baron Health and Power Dividend
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baron and Power is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care and Power Dividend Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Dividend Index 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 Power Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Dividend Index has no effect on the direction of Baron Health i.e., Baron Health and Power Dividend go up and down completely randomly.
Pair Corralation between Baron Health and Power Dividend
Assuming the 90 days horizon Baron Health Care is expected to under-perform the Power Dividend. In addition to that, Baron Health is 1.61 times more volatile than Power Dividend Index. It trades about -0.23 of its total potential returns per unit of risk. Power Dividend Index is currently generating about -0.11 per unit of volatility. If you would invest 982.00 in Power Dividend Index on September 12, 2024 and sell it today you would lose (14.00) from holding Power Dividend Index or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Health Care vs. Power Dividend Index
Performance |
| Timeline |
| Baron Health Care |
| Power Dividend Index |
Baron Health and Power Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Health and Power Dividend
The main advantage of trading using opposite Baron Health and Power Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health position performs unexpectedly, Power Dividend 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 Power Dividend will offset losses from the drop in Power Dividend's long position.| Baron Health vs. Adams Natural Resources | Baron Health vs. Oil Gas Ultrasector | Baron Health vs. Dreyfus Natural Resources | Baron Health vs. Alpsalerian Energy Infrastructure |
| Power Dividend vs. SCOR PK | Power Dividend vs. Morningstar Unconstrained Allocation | Power Dividend vs. Via Renewables | Power Dividend vs. Bondbloxx ETF Trust |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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