Correlation Between Baron Partners and Baron International
Can any of the company-specific risk be diversified away by investing in both Baron Partners and Baron International 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 International 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 International Growth, you can compare the effects of market volatilities on Baron Partners and Baron International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Partners and Baron International.
Diversification Opportunities for Baron Partners and Baron International
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baron and Baron is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Baron Partners Fund and Baron International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron International 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron International has no effect on the direction of Baron Partners i.e., Baron Partners and Baron International go up and down completely randomly.
Pair Corralation between Baron Partners and Baron International
Assuming the 90 days horizon Baron Partners Fund is expected to generate 3.5 times more return on investment than Baron International. However, Baron Partners is 3.5 times more volatile than Baron International Growth. It trades about 0.23 of its potential returns per unit of risk. Baron International Growth is currently generating about -0.13 per unit of risk. If you would invest 16,598 in Baron Partners Fund on August 29, 2024 and sell it today you would earn a total of 2,207 from holding Baron Partners Fund or generate 13.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Partners Fund vs. Baron International Growth
Performance |
| Timeline |
| Baron Partners |
| Baron International |
Baron Partners and Baron International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Partners and Baron International
The main advantage of trading using opposite Baron Partners and Baron International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Partners position performs unexpectedly, Baron International 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 International will offset losses from the drop in Baron International's long position.| Baron Partners vs. Nasdaq 100 Fund Investor | Baron Partners vs. Meridian Growth Fund | Baron Partners vs. Baron Opportunity Fund | Baron Partners vs. Baron Small Cap |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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