Correlation Between Ariel Appreciation and Baron Growth
Can any of the company-specific risk be diversified away by investing in both Ariel Appreciation 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 Ariel Appreciation and Baron Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ariel Appreciation Fund and Baron Growth Fund, you can compare the effects of market volatilities on Ariel Appreciation 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 Ariel Appreciation with a short position of Baron Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ariel Appreciation and Baron Growth.
Diversification Opportunities for Ariel Appreciation and Baron Growth
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ariel and Baron is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ariel Appreciation Fund and Baron Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Growth and Ariel Appreciation 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 Ariel Appreciation Fund 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 Ariel Appreciation i.e., Ariel Appreciation and Baron Growth go up and down completely randomly.
Pair Corralation between Ariel Appreciation and Baron Growth
Assuming the 90 days horizon Ariel Appreciation Fund is expected to generate 1.28 times more return on investment than Baron Growth. However, Ariel Appreciation is 1.28 times more volatile than Baron Growth Fund. It trades about 0.21 of its potential returns per unit of risk. Baron Growth Fund is currently generating about 0.13 per unit of risk. If you would invest 4,214 in Ariel Appreciation Fund on August 25, 2024 and sell it today you would earn a total of 247.00 from holding Ariel Appreciation Fund or generate 5.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ariel Appreciation Fund vs. Baron Growth Fund
Performance |
| Timeline |
| Ariel Appreciation |
| Baron Growth |
Ariel Appreciation and Baron Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ariel Appreciation and Baron Growth
The main advantage of trading using opposite Ariel Appreciation and Baron Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ariel Appreciation 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.| Ariel Appreciation vs. Morningstar Unconstrained Allocation | Ariel Appreciation vs. Touchstone Large Cap | Ariel Appreciation vs. Aqr Large Cap | Ariel Appreciation vs. William Blair Large |
| Baron Growth vs. Baron Asset Fund | Baron Growth vs. Baron Small Cap | Baron Growth vs. Baron Partners Fund | Baron Growth vs. Fidelity Diversified International |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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