Correlation Between Baron Select and Ishares Municipal
Can any of the company-specific risk be diversified away by investing in both Baron Select and Ishares Municipal 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 Select and Ishares Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Select Funds and Ishares Municipal Bond, you can compare the effects of market volatilities on Baron Select and Ishares Municipal 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 Select with a short position of Ishares Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Select and Ishares Municipal.
Diversification Opportunities for Baron Select and Ishares Municipal
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baron and Ishares is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Baron Select Funds and Ishares Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ishares Municipal Bond and Baron Select 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 Select Funds are associated (or correlated) with Ishares Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ishares Municipal Bond has no effect on the direction of Baron Select i.e., Baron Select and Ishares Municipal go up and down completely randomly.
Pair Corralation between Baron Select and Ishares Municipal
Assuming the 90 days horizon Baron Select Funds is expected to generate 5.72 times more return on investment than Ishares Municipal. However, Baron Select is 5.72 times more volatile than Ishares Municipal Bond. It trades about 0.11 of its potential returns per unit of risk. Ishares Municipal Bond is currently generating about 0.06 per unit of risk. If you would invest 801.00 in Baron Select Funds on August 26, 2024 and sell it today you would earn a total of 507.00 from holding Baron Select Funds or generate 63.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Select Funds vs. Ishares Municipal Bond
Performance |
| Timeline |
| Baron Select Funds |
| Ishares Municipal Bond |
Baron Select and Ishares Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Select and Ishares Municipal
The main advantage of trading using opposite Baron Select and Ishares Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Select position performs unexpectedly, Ishares Municipal 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 Ishares Municipal will offset losses from the drop in Ishares Municipal's long position.| Baron Select vs. Ishares Municipal Bond | Baron Select vs. Transamerica Intermediate Muni | Baron Select vs. Morningstar Municipal Bond | Baron Select vs. California High Yield Municipal |
| Ishares Municipal vs. Victory Integrity Small Cap | Ishares Municipal vs. Touchstone Small Cap | Ishares Municipal vs. Massmutual Select Small | Ishares Municipal vs. Champlain Small |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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