Correlation Between Baron Partners and Baron Global
Can any of the company-specific risk be diversified away by investing in both Baron Partners and Baron Global 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 Partners and Baron Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Partners Fund and Baron Global Advantage, you can compare the effects of market volatilities on Baron Partners and Baron Global 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 Partners with a short position of Baron Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Partners and Baron Global.
Diversification Opportunities for Baron Partners and Baron Global
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baron and BARON is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Baron Partners Fund and Baron Global Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Global Advantage and Baron Partners 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 Partners Fund are associated (or correlated) with Baron Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Global Advantage has no effect on the direction of Baron Partners i.e., Baron Partners and Baron Global go up and down completely randomly.
Pair Corralation between Baron Partners and Baron Global
Assuming the 90 days horizon Baron Partners Fund is expected to generate 2.22 times more return on investment than Baron Global. However, Baron Partners is 2.22 times more volatile than Baron Global Advantage. It trades about 0.37 of its potential returns per unit of risk. Baron Global Advantage is currently generating about 0.45 per unit of risk. If you would invest 16,550 in Baron Partners Fund on September 1, 2024 and sell it today you would earn a total of 3,299 from holding Baron Partners Fund or generate 19.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Partners Fund vs. Baron Global Advantage
Performance |
| Timeline |
| Baron Partners |
| Baron Global Advantage |
Baron Partners and Baron Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Partners and Baron Global
The main advantage of trading using opposite Baron Partners and Baron Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Partners position performs unexpectedly, Baron Global 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 Global will offset losses from the drop in Baron Global's long position.| Baron Partners vs. Baron Focused Growth | Baron Partners vs. Baron Opportunity Fund | Baron Partners vs. Baron Partners Fund | Baron Partners vs. Baron Discovery Fund |
| Baron Global vs. Baron Opportunity Fund | Baron Global vs. Morgan Stanley Multi | Baron Global vs. Baron Focused Growth | Baron Global vs. Mid Cap Growth |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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