Correlation Between Baron Intl and Baron Health
Can any of the company-specific risk be diversified away by investing in both Baron Intl and Baron Health 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 Intl and Baron Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Intl Growth and Baron Health Care, you can compare the effects of market volatilities on Baron Intl and Baron Health 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 Intl with a short position of Baron Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Intl and Baron Health.
Diversification Opportunities for Baron Intl and Baron Health
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Baron and Baron is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Baron Intl Growth and Baron Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Health Care and Baron Intl 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 Intl Growth are associated (or correlated) with Baron Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Health Care has no effect on the direction of Baron Intl i.e., Baron Intl and Baron Health go up and down completely randomly.
Pair Corralation between Baron Intl and Baron Health
Assuming the 90 days horizon Baron Intl is expected to generate 1.61 times less return on investment than Baron Health. But when comparing it to its historical volatility, Baron Intl Growth is 1.2 times less risky than Baron Health. It trades about 0.23 of its potential returns per unit of risk. Baron Health Care is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,934 in Baron Health Care on November 3, 2024 and sell it today you would earn a total of 104.00 from holding Baron Health Care or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Baron Intl Growth vs. Baron Health Care
Performance |
| Timeline |
| Baron Intl Growth |
| Baron Health Care |
Baron Intl and Baron Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Intl and Baron Health
The main advantage of trading using opposite Baron Intl and Baron Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Intl position performs unexpectedly, Baron Health 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 Baron Health will offset losses from the drop in Baron Health's long position.| Baron Intl vs. Lgm Risk Managed | Baron Intl vs. Artisan High Income | Baron Intl vs. Pace High Yield | Baron Intl vs. Needham Aggressive Growth |
| Baron Health vs. Arrow Managed Futures | Baron Health vs. Fidelity Sai Inflationfocused | Baron Health vs. Short Duration Inflation | Baron Health vs. Atac Inflation Rotation |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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