Correlation Between Baron Partners and Baron Opportunity
Can any of the company-specific risk be diversified away by investing in both Baron Partners and Baron Opportunity 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 Opportunity 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 Opportunity Fund, you can compare the effects of market volatilities on Baron Partners and Baron Opportunity 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 Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Partners and Baron Opportunity.
Diversification Opportunities for Baron Partners and Baron Opportunity
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baron and Baron is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Baron Partners Fund and Baron Opportunity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Opportunity 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 Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Opportunity has no effect on the direction of Baron Partners i.e., Baron Partners and Baron Opportunity go up and down completely randomly.
Pair Corralation between Baron Partners and Baron Opportunity
Assuming the 90 days horizon Baron Partners Fund is expected to generate 1.35 times more return on investment than Baron Opportunity. However, Baron Partners is 1.35 times more volatile than Baron Opportunity Fund. It trades about 0.12 of its potential returns per unit of risk. Baron Opportunity Fund is currently generating about 0.11 per unit of risk. If you would invest 14,903 in Baron Partners Fund on September 3, 2024 and sell it today you would earn a total of 4,946 from holding Baron Partners Fund or generate 33.19% 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 Opportunity Fund
Performance |
| Timeline |
| Baron Partners |
| Baron Opportunity |
Baron Partners and Baron Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Partners and Baron Opportunity
The main advantage of trading using opposite Baron Partners and Baron Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Partners position performs unexpectedly, Baron Opportunity 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 Opportunity will offset losses from the drop in Baron Opportunity's long position.| Baron Partners vs. Baron Partners | Baron Partners vs. Baron Focused Growth | Baron Partners vs. Baron Opportunity Fund | Baron Partners vs. Baron Partners Fund |
| Baron Opportunity vs. Multimedia Portfolio Multimedia | Baron Opportunity vs. Sarofim Equity | Baron Opportunity vs. Locorr Dynamic Equity | Baron Opportunity vs. Ms Global Fixed |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |