Correlation Between GSE Systems and Baron Select
Can any of the company-specific risk be diversified away by investing in both GSE Systems and Baron Select 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 GSE Systems and Baron Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GSE Systems and Baron Select Funds, you can compare the effects of market volatilities on GSE Systems and Baron Select 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 GSE Systems with a short position of Baron Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of GSE Systems and Baron Select.
Diversification Opportunities for GSE Systems and Baron Select
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GSE and Baron is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding GSE Systems and Baron Select Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Select Funds and GSE Systems 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 GSE Systems are associated (or correlated) with Baron Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Select Funds has no effect on the direction of GSE Systems i.e., GSE Systems and Baron Select go up and down completely randomly.
Pair Corralation between GSE Systems and Baron Select
Considering the 90-day investment horizon GSE Systems is expected to generate 4.12 times more return on investment than Baron Select. However, GSE Systems is 4.12 times more volatile than Baron Select Funds. It trades about 0.06 of its potential returns per unit of risk. Baron Select Funds is currently generating about 0.11 per unit of risk. If you would invest 372.00 in GSE Systems on August 25, 2024 and sell it today you would earn a total of 87.00 from holding GSE Systems or generate 23.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 87.4% |
| Values | Daily Returns |
GSE Systems vs. Baron Select Funds
Performance |
| Timeline |
| GSE Systems |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Baron Select Funds |
GSE Systems and Baron Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GSE Systems and Baron Select
The main advantage of trading using opposite GSE Systems and Baron Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GSE Systems position performs unexpectedly, Baron Select 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 Select will offset losses from the drop in Baron Select's long position.| GSE Systems vs. LifeSpeak | GSE Systems vs. RenoWorks Software | GSE Systems vs. 01 Communique Laboratory | GSE Systems vs. RESAAS Services |
| Baron Select vs. VEEA | Baron Select vs. VivoPower International PLC | Baron Select vs. WEBTOON Entertainment Common | Baron Select vs. Baron Real Estate |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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