Correlation Between Balanced Fund and Baron Health
Can any of the company-specific risk be diversified away by investing in both Balanced Fund 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 Balanced Fund and Baron Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Fund Institutional and Baron Health Care, you can compare the effects of market volatilities on Balanced Fund 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 Balanced Fund with a short position of Baron Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and Baron Health.
Diversification Opportunities for Balanced Fund and Baron Health
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Balanced and Baron is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Institutional 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 Balanced 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 Balanced Fund Institutional 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 Balanced Fund i.e., Balanced Fund and Baron Health go up and down completely randomly.
Pair Corralation between Balanced Fund and Baron Health
Assuming the 90 days horizon Balanced Fund Institutional is expected to generate 0.65 times more return on investment than Baron Health. However, Balanced Fund Institutional is 1.54 times less risky than Baron Health. It trades about 0.09 of its potential returns per unit of risk. Baron Health Care is currently generating about 0.04 per unit of risk. If you would invest 1,749 in Balanced Fund Institutional on September 2, 2024 and sell it today you would earn a total of 348.00 from holding Balanced Fund Institutional or generate 19.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Balanced Fund Institutional vs. Baron Health Care
Performance |
| Timeline |
| Balanced Fund Instit |
| Baron Health Care |
Balanced Fund and Baron Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Fund and Baron Health
The main advantage of trading using opposite Balanced Fund and Baron Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Fund 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.| Balanced Fund vs. Tributary Smallmid Cap | Balanced Fund vs. Tributary Smallmid Cap | Balanced Fund vs. Balanced Fund Institutional | Balanced Fund vs. Income Fund Institutional |
| Baron Health vs. Lgm Risk Managed | Baron Health vs. Western Asset High | Baron Health vs. Pace High Yield | Baron Health vs. Pioneer 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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