Correlation Between Baron Real and VivoPower International
Can any of the company-specific risk be diversified away by investing in both Baron Real and VivoPower 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 Real and VivoPower International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Real Estate and VivoPower International PLC, you can compare the effects of market volatilities on Baron Real and VivoPower 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 Real with a short position of VivoPower International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Real and VivoPower International.
Diversification Opportunities for Baron Real and VivoPower International
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Baron and VivoPower is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Baron Real Estate and VivoPower International PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VivoPower International and Baron Real 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 Real Estate are associated (or correlated) with VivoPower International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VivoPower International has no effect on the direction of Baron Real i.e., Baron Real and VivoPower International go up and down completely randomly.
Pair Corralation between Baron Real and VivoPower International
Assuming the 90 days horizon Baron Real is expected to generate 29.64 times less return on investment than VivoPower International. But when comparing it to its historical volatility, Baron Real Estate is 17.21 times less risky than VivoPower International. It trades about 0.07 of its potential returns per unit of risk. VivoPower International PLC is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 78.00 in VivoPower International PLC on August 25, 2024 and sell it today you would earn a total of 14.00 from holding VivoPower International PLC or generate 17.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Real Estate vs. VivoPower International PLC
Performance |
| Timeline |
| Baron Real Estate |
| VivoPower International |
Baron Real and VivoPower International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Real and VivoPower International
The main advantage of trading using opposite Baron Real and VivoPower International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Real position performs unexpectedly, VivoPower 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 VivoPower International will offset losses from the drop in VivoPower International's long position.| Baron Real vs. Baron Opportunity Fund | Baron Real vs. Baron Global Advantage | Baron Real vs. Baron Partners Fund | Baron Real vs. Baron Focused Growth |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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