Correlation Between Baron Select and Dreyfus Technology
Can any of the company-specific risk be diversified away by investing in both Baron Select and Dreyfus Technology 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 Dreyfus Technology 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 Dreyfus Technology Growth, you can compare the effects of market volatilities on Baron Select and Dreyfus Technology 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 Dreyfus Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Select and Dreyfus Technology.
Diversification Opportunities for Baron Select and Dreyfus Technology
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Baron and Dreyfus is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Baron Select Funds and Dreyfus Technology Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Technology Growth 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 Dreyfus Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Technology Growth has no effect on the direction of Baron Select i.e., Baron Select and Dreyfus Technology go up and down completely randomly.
Pair Corralation between Baron Select and Dreyfus Technology
Assuming the 90 days horizon Baron Select Funds is expected to generate 1.07 times more return on investment than Dreyfus Technology. However, Baron Select is 1.07 times more volatile than Dreyfus Technology Growth. It trades about 0.13 of its potential returns per unit of risk. Dreyfus Technology Growth is currently generating about 0.11 per unit of risk. If you would invest 552.00 in Baron Select Funds on September 12, 2024 and sell it today you would earn a total of 787.00 from holding Baron Select Funds or generate 142.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Select Funds vs. Dreyfus Technology Growth
Performance |
| Timeline |
| Baron Select Funds |
| Dreyfus Technology Growth |
Baron Select and Dreyfus Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Select and Dreyfus Technology
The main advantage of trading using opposite Baron Select and Dreyfus Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Select position performs unexpectedly, Dreyfus Technology 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 Dreyfus Technology will offset losses from the drop in Dreyfus Technology's long position.| Baron Select vs. Gamco Natural Resources | Baron Select vs. Dreyfus Natural Resources | Baron Select vs. Gmo Resources | Baron Select vs. Clearbridge Energy Mlp |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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