Correlation Between Ab Global and Baron Opportunity
Can any of the company-specific risk be diversified away by investing in both Ab Global and Baron Opportunity 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 Ab Global and Baron Opportunity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global Risk and Baron Opportunity Fund, you can compare the effects of market volatilities on Ab Global and Baron Opportunity 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 Ab Global with a short position of Baron Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Baron Opportunity.
Diversification Opportunities for Ab Global and Baron Opportunity
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CABIX and Baron is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Risk and Baron Opportunity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Opportunity and Ab Global 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 Ab Global Risk are associated (or correlated) with Baron Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Opportunity has no effect on the direction of Ab Global i.e., Ab Global and Baron Opportunity go up and down completely randomly.
Pair Corralation between Ab Global and Baron Opportunity
Assuming the 90 days horizon Ab Global Risk is expected to under-perform the Baron Opportunity. In addition to that, Ab Global is 1.79 times more volatile than Baron Opportunity Fund. It trades about -0.25 of its total potential returns per unit of risk. Baron Opportunity Fund is currently generating about -0.1 per unit of volatility. If you would invest 5,377 in Baron Opportunity Fund on October 7, 2024 and sell it today you would lose (205.00) from holding Baron Opportunity Fund or give up 3.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Risk vs. Baron Opportunity Fund
Performance |
| Timeline |
| Ab Global Risk |
| Baron Opportunity |
Ab Global and Baron Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Baron Opportunity
The main advantage of trading using opposite Ab Global and Baron Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Baron Opportunity 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 Opportunity will offset losses from the drop in Baron Opportunity's long position.| Ab Global vs. All Asset Fund | Ab Global vs. Pimco All Asset | Ab Global vs. All Asset Fund | Ab Global vs. Pimco All Asset |
| Baron Opportunity vs. Pace High Yield | Baron Opportunity vs. Artisan High Income | Baron Opportunity vs. Virtus High Yield | Baron Opportunity vs. Voya 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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