Correlation Between Baron Select and Transamerica Intermediate
Can any of the company-specific risk be diversified away by investing in both Baron Select and Transamerica Intermediate 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 Transamerica Intermediate 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 Transamerica Intermediate Muni, you can compare the effects of market volatilities on Baron Select and Transamerica Intermediate 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 Transamerica Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Select and Transamerica Intermediate.
Diversification Opportunities for Baron Select and Transamerica Intermediate
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baron and Transamerica is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Baron Select Funds and Transamerica Intermediate Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Intermediate 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 Transamerica Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Intermediate has no effect on the direction of Baron Select i.e., Baron Select and Transamerica Intermediate go up and down completely randomly.
Pair Corralation between Baron Select and Transamerica Intermediate
Assuming the 90 days horizon Baron Select Funds is expected to generate 6.31 times more return on investment than Transamerica Intermediate. However, Baron Select is 6.31 times more volatile than Transamerica Intermediate Muni. It trades about 0.11 of its potential returns per unit of risk. Transamerica Intermediate Muni is currently generating about 0.07 per unit of risk. If you would invest 589.00 in Baron Select Funds on August 30, 2024 and sell it today you would earn a total of 713.00 from holding Baron Select Funds or generate 121.05% 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. Transamerica Intermediate Muni
Performance |
| Timeline |
| Baron Select Funds |
| Transamerica Intermediate |
Baron Select and Transamerica Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Select and Transamerica Intermediate
The main advantage of trading using opposite Baron Select and Transamerica Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Select position performs unexpectedly, Transamerica Intermediate 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 Transamerica Intermediate will offset losses from the drop in Transamerica Intermediate's long position.| Baron Select vs. Fidelity Advisor Technology | Baron Select vs. Science Technology Fund | Baron Select vs. Janus Global Technology | Baron Select vs. Blackrock Science Technology |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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