Correlation Between Clipper Fund and Baron Growth
Can any of the company-specific risk be diversified away by investing in both Clipper Fund 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 Clipper Fund and Baron Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clipper Fund Inc and Baron Growth Fund, you can compare the effects of market volatilities on Clipper Fund 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 Clipper Fund with a short position of Baron Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clipper Fund and Baron Growth.
Diversification Opportunities for Clipper Fund and Baron Growth
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Clipper and Baron is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Clipper Fund Inc and Baron Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Growth and Clipper Fund 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 Clipper Fund Inc 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 Clipper Fund i.e., Clipper Fund and Baron Growth go up and down completely randomly.
Pair Corralation between Clipper Fund and Baron Growth
Assuming the 90 days horizon Clipper Fund Inc is expected to generate 1.21 times more return on investment than Baron Growth. However, Clipper Fund is 1.21 times more volatile than Baron Growth Fund. It trades about 0.19 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 14,592 in Clipper Fund Inc on August 25, 2024 and sell it today you would earn a total of 732.00 from holding Clipper Fund Inc or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clipper Fund Inc vs. Baron Growth Fund
Performance |
| Timeline |
| Clipper Fund |
| Baron Growth |
Clipper Fund and Baron Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clipper Fund and Baron Growth
The main advantage of trading using opposite Clipper Fund and Baron Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clipper Fund 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.| Clipper Fund vs. Value Fund Value | Clipper Fund vs. Meridian Trarian Fund | Clipper Fund vs. Longleaf Partners Fund | Clipper Fund vs. Mairs Power Growth |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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