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
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Baron and Clearbridge is -0.52. 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 under-perform the Clearbridge Large. But the mutual fund apears to be less risky and, when comparing its historical volatility, Baron Health Care is 1.35 times less risky than Clearbridge Large. The mutual fund trades about -0.24 of its potential returns per unit of risk. The Clearbridge Large Cap is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 8,038 in Clearbridge Large Cap on September 14, 2024 and sell it today you would lose (255.00) from holding Clearbridge Large Cap or give up 3.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| 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. Ab Bond Inflation | Baron Health vs. Goldman Sachs Inflation | Baron Health vs. Ab Bond Inflation | Baron Health vs. Ab Bond Inflation |
| Clearbridge Large vs. L Abbett Growth | Clearbridge Large vs. Small Pany Growth | Clearbridge Large vs. Artisan Small Cap | Clearbridge Large vs. Rational Defensive Growth |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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