Correlation Between Baron Small and Baron Intl
Can any of the company-specific risk be diversified away by investing in both Baron Small and Baron Intl 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 Baron Intl 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 Baron Intl Growth, you can compare the effects of market volatilities on Baron Small and Baron Intl 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 Baron Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Small and Baron Intl.
Diversification Opportunities for Baron Small and Baron Intl
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Baron and Baron is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Baron Small Cap and Baron Intl Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Intl Growth 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 Baron Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Intl Growth has no effect on the direction of Baron Small i.e., Baron Small and Baron Intl go up and down completely randomly.
Pair Corralation between Baron Small and Baron Intl
Assuming the 90 days horizon Baron Small Cap is expected to generate 2.07 times more return on investment than Baron Intl. However, Baron Small is 2.07 times more volatile than Baron Intl Growth. It trades about 0.29 of its potential returns per unit of risk. Baron Intl Growth is currently generating about 0.02 per unit of risk. If you would invest 3,682 in Baron Small Cap on September 3, 2024 and sell it today you would earn a total of 328.00 from holding Baron Small Cap or generate 8.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Small Cap vs. Baron Intl Growth
Performance |
| Timeline |
| Baron Small Cap |
| Baron Intl Growth |
Baron Small and Baron Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Small and Baron Intl
The main advantage of trading using opposite Baron Small and Baron Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Small position performs unexpectedly, Baron Intl 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 Intl will offset losses from the drop in Baron Intl's long position.| Baron Small vs. Calamos Market Neutral | Baron Small vs. Kinetics Market Opportunities | Baron Small vs. Templeton Developing Markets | Baron Small vs. Mondrian Emerging Markets |
| Baron Intl vs. Versatile Bond Portfolio | Baron Intl vs. Artisan High Income | Baron Intl vs. The National Tax Free | Baron Intl vs. The Fixed Income |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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