Correlation Between Black Oak and Baron Health
Can any of the company-specific risk be diversified away by investing in both Black Oak 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 Black Oak and Baron Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Oak Emerging and Baron Health Care, you can compare the effects of market volatilities on Black Oak 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 Black Oak with a short position of Baron Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Oak and Baron Health.
Diversification Opportunities for Black Oak and Baron Health
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Black and Baron is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Black Oak Emerging 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 Black Oak 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 Black Oak Emerging 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 Black Oak i.e., Black Oak and Baron Health go up and down completely randomly.
Pair Corralation between Black Oak and Baron Health
Assuming the 90 days horizon Black Oak Emerging is expected to generate 1.64 times more return on investment than Baron Health. However, Black Oak is 1.64 times more volatile than Baron Health Care. It trades about 0.06 of its potential returns per unit of risk. Baron Health Care is currently generating about 0.04 per unit of risk. If you would invest 741.00 in Black Oak Emerging on September 3, 2024 and sell it today you would earn a total of 78.00 from holding Black Oak Emerging or generate 10.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Oak Emerging vs. Baron Health Care
Performance |
| Timeline |
| Black Oak Emerging |
| Baron Health Care |
Black Oak and Baron Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Oak and Baron Health
The main advantage of trading using opposite Black Oak and Baron Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Oak 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.| Black Oak vs. Red Oak Technology | Black Oak vs. Pin Oak Equity | Black Oak vs. White Oak Select | Black Oak vs. Live Oak Health |
| Baron Health vs. Us Government Securities | Baron Health vs. Us Government Securities | Baron Health vs. Aig Government Money | Baron Health vs. Short Term Government Fund |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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