Correlation Between Barings Us and Baron Growth
Can any of the company-specific risk be diversified away by investing in both Barings Us and Baron Growth 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 Barings Us and Baron Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings High Yield and Baron Growth Fund, you can compare the effects of market volatilities on Barings Us and Baron Growth 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 Barings Us with a short position of Baron Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Us and Baron Growth.
Diversification Opportunities for Barings Us and Baron Growth
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Barings and Baron is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Barings High Yield and Baron Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Growth and Barings Us 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 Barings High Yield are associated (or correlated) with Baron Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Growth has no effect on the direction of Barings Us i.e., Barings Us and Baron Growth go up and down completely randomly.
Pair Corralation between Barings Us and Baron Growth
Assuming the 90 days horizon Barings High Yield is expected to generate 0.25 times more return on investment than Baron Growth. However, Barings High Yield is 3.98 times less risky than Baron Growth. It trades about 0.15 of its potential returns per unit of risk. Baron Growth Fund is currently generating about 0.02 per unit of risk. If you would invest 676.00 in Barings High Yield on November 1, 2024 and sell it today you would earn a total of 140.00 from holding Barings High Yield or generate 20.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Barings High Yield vs. Baron Growth Fund
Performance |
| Timeline |
| Barings High Yield |
| Baron Growth |
Barings Us and Baron Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Us and Baron Growth
The main advantage of trading using opposite Barings Us and Baron Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Us position performs unexpectedly, Baron Growth 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 Growth will offset losses from the drop in Baron Growth's long position.| Barings Us vs. Virtus High Yield | Barings Us vs. Ab High Income | Barings Us vs. Prudential High Yield | Barings Us vs. Millerhoward High Income |
| Baron Growth vs. Barings High Yield | Baron Growth vs. Virtus High Yield | Baron Growth vs. Prudential High Yield | Baron Growth vs. Ab High 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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