Correlation Between Barings Us and Baron Health
Can any of the company-specific risk be diversified away by investing in both Barings Us and Baron Health 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 Health 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 Health Care, you can compare the effects of market volatilities on Barings Us and Baron Health 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 Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Us and Baron Health.
Diversification Opportunities for Barings Us and Baron Health
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barings and Baron is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Barings High Yield and Baron Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Health Care 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 Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Health Care has no effect on the direction of Barings Us i.e., Barings Us and Baron Health go up and down completely randomly.
Pair Corralation between Barings Us and Baron Health
Assuming the 90 days horizon Barings High Yield is expected to generate 0.22 times more return on investment than Baron Health. However, Barings High Yield is 4.61 times less risky than Baron Health. It trades about 0.18 of its potential returns per unit of risk. Baron Health Care is currently generating about 0.0 per unit of risk. If you would invest 770.00 in Barings High Yield on October 17, 2024 and sell it today you would earn a total of 38.00 from holding Barings High Yield or generate 4.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings High Yield vs. Baron Health Care
Performance |
| Timeline |
| Barings High Yield |
| Baron Health Care |
Barings Us and Baron Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Us and Baron Health
The main advantage of trading using opposite Barings Us and Baron Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Us position performs unexpectedly, Baron Health 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 Health will offset losses from the drop in Baron Health's long position.| Barings Us vs. Queens Road Small | Barings Us vs. Ultramid Cap Profund Ultramid Cap | Barings Us vs. Great West Loomis Sayles | Barings Us vs. Valic Company I |
| Baron Health vs. Franklin High Yield | Baron Health vs. Blrc Sgy Mnp | Baron Health vs. Maryland Tax Free Bond | Baron Health vs. Barings High Yield |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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