Correlation Between Baron Health and Investment
Can any of the company-specific risk be diversified away by investing in both Baron Health and Investment 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 Investment 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 Investment Of America, you can compare the effects of market volatilities on Baron Health and Investment 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 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and Investment.
Diversification Opportunities for Baron Health and Investment
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baron and Investment is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care and Investment Of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment Of America 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 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment Of America has no effect on the direction of Baron Health i.e., Baron Health and Investment go up and down completely randomly.
Pair Corralation between Baron Health and Investment
Assuming the 90 days horizon Baron Health Care is expected to under-perform the Investment. In addition to that, Baron Health is 1.28 times more volatile than Investment Of America. It trades about 0.0 of its total potential returns per unit of risk. Investment Of America is currently generating about 0.15 per unit of volatility. If you would invest 6,099 in Investment Of America on August 29, 2024 and sell it today you would earn a total of 166.00 from holding Investment Of America or generate 2.72% 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. Investment Of America
Performance |
| Timeline |
| Baron Health Care |
| Investment Of America |
Baron Health and Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Health and Investment
The main advantage of trading using opposite Baron Health and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health position performs unexpectedly, Investment 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 Investment will offset losses from the drop in Investment's long position.| Baron Health vs. Baron Discovery Fund | Baron Health vs. Baron Global Advantage | Baron Health vs. Baron Real Estate | Baron Health vs. Baron Focused Growth |
| Investment vs. Income Fund Of | Investment vs. New World Fund | Investment vs. American Mutual Fund | Investment vs. American Mutual Fund |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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