Correlation Between Baron Real and Baron Health
Can any of the company-specific risk be diversified away by investing in both Baron Real and Baron Health 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 Baron Health 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 Baron Health Care, you can compare the effects of market volatilities on Baron Real and Baron Health 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 Baron Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Real and Baron Health.
Diversification Opportunities for Baron Real and Baron Health
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baron and Baron is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Baron Real Estate and Baron Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Health Care 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 Baron Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Health Care has no effect on the direction of Baron Real i.e., Baron Real and Baron Health go up and down completely randomly.
Pair Corralation between Baron Real and Baron Health
Assuming the 90 days horizon Baron Real Estate is expected to generate 0.96 times more return on investment than Baron Health. However, Baron Real Estate is 1.04 times less risky than Baron Health. It trades about 0.27 of its potential returns per unit of risk. Baron Health Care is currently generating about 0.08 per unit of risk. If you would invest 1,657 in Baron Real Estate on September 1, 2024 and sell it today you would earn a total of 96.00 from holding Baron Real Estate or generate 5.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Real Estate vs. Baron Health Care
Performance |
| Timeline |
| Baron Real Estate |
| Baron Health Care |
Baron Real and Baron Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Real and Baron Health
The main advantage of trading using opposite Baron Real and Baron Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Real position performs unexpectedly, Baron Health 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 Health will offset losses from the drop in Baron Health's long position.| Baron Real vs. Champlain Mid Cap | Baron Real vs. Artisan Small Cap | Baron Real vs. Vanguard Growth And | Baron Real vs. T Rowe Price |
| Baron Health vs. Black Oak Emerging | Baron Health vs. Transamerica Emerging Markets | Baron Health vs. Ashmore Emerging Markets | Baron Health vs. Shelton Emerging Markets |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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