Correlation Between Baron Real and Touchstone Small
Can any of the company-specific risk be diversified away by investing in both Baron Real and Touchstone Small 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 Touchstone Small 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 Touchstone Small Cap, you can compare the effects of market volatilities on Baron Real and Touchstone Small 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 Touchstone Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Real and Touchstone Small.
Diversification Opportunities for Baron Real and Touchstone Small
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baron and Touchstone is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Baron Real Estate and Touchstone Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Small Cap 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 Touchstone Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Small Cap has no effect on the direction of Baron Real i.e., Baron Real and Touchstone Small go up and down completely randomly.
Pair Corralation between Baron Real and Touchstone Small
Assuming the 90 days horizon Baron Real Estate is expected to under-perform the Touchstone Small. In addition to that, Baron Real is 1.18 times more volatile than Touchstone Small Cap. It trades about -0.29 of its total potential returns per unit of risk. Touchstone Small Cap is currently generating about -0.33 per unit of volatility. If you would invest 4,083 in Touchstone Small Cap on October 10, 2024 and sell it today you would lose (277.00) from holding Touchstone Small Cap or give up 6.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Real Estate vs. Touchstone Small Cap
Performance |
| Timeline |
| Baron Real Estate |
| Touchstone Small Cap |
Baron Real and Touchstone Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Real and Touchstone Small
The main advantage of trading using opposite Baron Real and Touchstone Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Real position performs unexpectedly, Touchstone Small 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 Touchstone Small will offset losses from the drop in Touchstone Small's long position.| Baron Real vs. American Funds Inflation | Baron Real vs. Inflation Protected Bond Fund | Baron Real vs. Atac Inflation Rotation | Baron Real vs. Nationwide Inflation Protected Securities |
| Touchstone Small vs. Hsbc Government Money | Touchstone Small vs. Prudential Government Money | Touchstone Small vs. Nationwide Government Bond | Touchstone Small vs. Schwab Government Money |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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