Correlation Between Baron Health and Victory Special
Can any of the company-specific risk be diversified away by investing in both Baron Health and Victory Special 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 Victory Special 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 Victory Special Value, you can compare the effects of market volatilities on Baron Health and Victory Special 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 Victory Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and Victory Special.
Diversification Opportunities for Baron Health and Victory Special
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baron and Victory is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care and Victory Special Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Special Value 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 Victory Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Special Value has no effect on the direction of Baron Health i.e., Baron Health and Victory Special go up and down completely randomly.
Pair Corralation between Baron Health and Victory Special
Assuming the 90 days horizon Baron Health is expected to generate 4.24 times less return on investment than Victory Special. But when comparing it to its historical volatility, Baron Health Care is 1.24 times less risky than Victory Special. It trades about 0.03 of its potential returns per unit of risk. Victory Special Value is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,426 in Victory Special Value on September 3, 2024 and sell it today you would earn a total of 343.00 from holding Victory Special Value or generate 14.14% 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. Victory Special Value
Performance |
| Timeline |
| Baron Health Care |
| Victory Special Value |
Baron Health and Victory Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Health and Victory Special
The main advantage of trading using opposite Baron Health and Victory Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health position performs unexpectedly, Victory Special 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 Victory Special will offset losses from the drop in Victory Special's long position.| Baron Health vs. Vanguard Health Care | Baron Health vs. Vanguard Health Care | Baron Health vs. T Rowe Price | Baron Health vs. T Rowe Price |
| Victory Special vs. Prudential Health Sciences | Victory Special vs. Eventide Healthcare Life | Victory Special vs. Baron Health Care | Victory Special vs. Alphacentric Lifesci Healthcare |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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