Correlation Between Baron Small and VEEA
Can any of the company-specific risk be diversified away by investing in both Baron Small and VEEA 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 Small and VEEA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Small Cap and VEEA, you can compare the effects of market volatilities on Baron Small and VEEA 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 Small with a short position of VEEA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Small and VEEA.
Diversification Opportunities for Baron Small and VEEA
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Baron and VEEA is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Baron Small Cap and VEEA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VEEA and Baron Small 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 Small Cap are associated (or correlated) with VEEA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VEEA has no effect on the direction of Baron Small i.e., Baron Small and VEEA go up and down completely randomly.
Pair Corralation between Baron Small and VEEA
Assuming the 90 days horizon Baron Small Cap is expected to generate 0.06 times more return on investment than VEEA. However, Baron Small Cap is 17.73 times less risky than VEEA. It trades about 0.07 of its potential returns per unit of risk. VEEA is currently generating about -0.05 per unit of risk. If you would invest 2,564 in Baron Small Cap on August 29, 2024 and sell it today you would earn a total of 1,154 from holding Baron Small Cap or generate 45.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 10.91% |
| Values | Daily Returns |
Baron Small Cap vs. VEEA
Performance |
| Timeline |
| Baron Small Cap |
| VEEA |
Baron Small and VEEA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Small and VEEA
The main advantage of trading using opposite Baron Small and VEEA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Small position performs unexpectedly, VEEA 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 VEEA will offset losses from the drop in VEEA's long position.| Baron Small vs. Baron Growth Fund | Baron Small vs. Baron Asset Fund | Baron Small vs. Baron Partners Fund | Baron Small vs. Nasdaq 100 Fund Investor |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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