Correlation Between Baron Health and Aig Government
Can any of the company-specific risk be diversified away by investing in both Baron Health and Aig Government 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 Aig Government 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 Aig Government Money, you can compare the effects of market volatilities on Baron Health and Aig Government 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 Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and Aig Government.
Diversification Opportunities for Baron Health and Aig Government
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Baron and Aig is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care and Aig Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aig Government Money 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 Aig Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aig Government Money has no effect on the direction of Baron Health i.e., Baron Health and Aig Government go up and down completely randomly.
Pair Corralation between Baron Health and Aig Government
Assuming the 90 days horizon Baron Health Care is expected to generate 4.42 times more return on investment than Aig Government. However, Baron Health is 4.42 times more volatile than Aig Government Money. It trades about 0.06 of its potential returns per unit of risk. Aig Government Money is currently generating about 0.12 per unit of risk. If you would invest 1,794 in Baron Health Care on September 4, 2024 and sell it today you would earn a total of 280.00 from holding Baron Health Care or generate 15.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.66% |
| Values | Daily Returns |
Baron Health Care vs. Aig Government Money
Performance |
| Timeline |
| Baron Health Care |
| Aig Government Money |
Baron Health and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Health and Aig Government
The main advantage of trading using opposite Baron Health and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health position performs unexpectedly, Aig Government 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 Aig Government will offset losses from the drop in Aig Government's long position.| Baron Health vs. Virtus Real Estate | Baron Health vs. Prudential Real Estate | Baron Health vs. Amg Managers Centersquare | Baron Health vs. Vanguard Reit Index |
| Aig Government vs. Simt Multi Asset Accumulation | Aig Government vs. Saat Market Growth | Aig Government vs. Simt Real Return | Aig Government vs. Simt Small Cap |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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