Correlation Between Baron Opportunity and Voya Target
Can any of the company-specific risk be diversified away by investing in both Baron Opportunity and Voya Target 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 Opportunity and Voya Target into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Opportunity Fund and Voya Target Retirement, you can compare the effects of market volatilities on Baron Opportunity and Voya Target 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 Opportunity with a short position of Voya Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Opportunity and Voya Target.
Diversification Opportunities for Baron Opportunity and Voya Target
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baron and Voya is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Baron Opportunity Fund and Voya Target Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Target Retirement and Baron Opportunity 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 Opportunity Fund are associated (or correlated) with Voya Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Target Retirement has no effect on the direction of Baron Opportunity i.e., Baron Opportunity and Voya Target go up and down completely randomly.
Pair Corralation between Baron Opportunity and Voya Target
Assuming the 90 days horizon Baron Opportunity Fund is expected to generate 2.33 times more return on investment than Voya Target. However, Baron Opportunity is 2.33 times more volatile than Voya Target Retirement. It trades about 0.12 of its potential returns per unit of risk. Voya Target Retirement is currently generating about 0.13 per unit of risk. If you would invest 3,390 in Baron Opportunity Fund on September 3, 2024 and sell it today you would earn a total of 1,519 from holding Baron Opportunity Fund or generate 44.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Opportunity Fund vs. Voya Target Retirement
Performance |
| Timeline |
| Baron Opportunity |
| Voya Target Retirement |
Baron Opportunity and Voya Target Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Opportunity and Voya Target
The main advantage of trading using opposite Baron Opportunity and Voya Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Opportunity position performs unexpectedly, Voya Target 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 Voya Target will offset losses from the drop in Voya Target's long position.| Baron Opportunity vs. Baron Partners Fund | Baron Opportunity vs. Baron Global Advantage | Baron Opportunity vs. Baron Fifth Avenue | Baron Opportunity vs. Baron Focused Growth |
| Voya Target vs. Massmutual Premier Diversified | Voya Target vs. Lord Abbett Diversified | Voya Target vs. Aqr Diversified Arbitrage | Voya Target vs. Adams Diversified Equity |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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