Correlation Between Baron Health and Simt High
Can any of the company-specific risk be diversified away by investing in both Baron Health and Simt High 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 Simt High 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 Simt High Yield, you can compare the effects of market volatilities on Baron Health and Simt High 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 Simt High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and Simt High.
Diversification Opportunities for Baron Health and Simt High
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baron and Simt is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care and Simt High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt High Yield 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 Simt High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt High Yield has no effect on the direction of Baron Health i.e., Baron Health and Simt High go up and down completely randomly.
Pair Corralation between Baron Health and Simt High
Assuming the 90 days horizon Baron Health Care is expected to under-perform the Simt High. In addition to that, Baron Health is 5.53 times more volatile than Simt High Yield. It trades about -0.01 of its total potential returns per unit of risk. Simt High Yield is currently generating about 0.18 per unit of volatility. If you would invest 538.00 in Simt High Yield on August 30, 2024 and sell it today you would earn a total of 4.00 from holding Simt High Yield or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Health Care vs. Simt High Yield
Performance |
| Timeline |
| Baron Health Care |
| Simt High Yield |
Baron Health and Simt High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Health and Simt High
The main advantage of trading using opposite Baron Health and Simt High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health position performs unexpectedly, Simt High 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 Simt High will offset losses from the drop in Simt High's long position.| Baron Health vs. Fidelity Advisor Technology | Baron Health vs. Fidelity Advisor Biotechnology | Baron Health vs. Fidelity Advisor Financial | Baron Health vs. Fidelity Advisor Utilities |
| Simt High vs. Mfs Technology Fund | Simt High vs. Firsthand Technology Opportunities | Simt High vs. Dreyfus Technology Growth | Simt High vs. Fidelity Advisor Technology |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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