Correlation Between Henderson Global and Baron Emerging
Can any of the company-specific risk be diversified away by investing in both Henderson Global and Baron Emerging 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 Henderson Global and Baron Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Henderson Global Equity and Baron Emerging Markets, you can compare the effects of market volatilities on Henderson Global and Baron Emerging 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 Henderson Global with a short position of Baron Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henderson Global and Baron Emerging.
Diversification Opportunities for Henderson Global and Baron Emerging
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Henderson and Baron is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Henderson Global Equity and Baron Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Emerging Markets and Henderson 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 Henderson Global Equity are associated (or correlated) with Baron Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Emerging Markets has no effect on the direction of Henderson Global i.e., Henderson Global and Baron Emerging go up and down completely randomly.
Pair Corralation between Henderson Global and Baron Emerging
Assuming the 90 days horizon Henderson Global Equity is expected to generate 0.66 times more return on investment than Baron Emerging. However, Henderson Global Equity is 1.51 times less risky than Baron Emerging. It trades about 0.08 of its potential returns per unit of risk. Baron Emerging Markets is currently generating about -0.11 per unit of risk. If you would invest 627.00 in Henderson Global Equity on September 5, 2024 and sell it today you would earn a total of 6.00 from holding Henderson Global Equity or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Henderson Global Equity vs. Baron Emerging Markets
Performance |
| Timeline |
| Henderson Global Equity |
| Baron Emerging Markets |
Henderson Global and Baron Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Henderson Global and Baron Emerging
The main advantage of trading using opposite Henderson Global and Baron Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henderson Global position performs unexpectedly, Baron Emerging 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 Emerging will offset losses from the drop in Baron Emerging's long position.| Henderson Global vs. Baron Emerging Markets | Henderson Global vs. Df Dent Midcap | Henderson Global vs. The Brown Capital | Henderson Global vs. Fidelity International Growth |
| Baron Emerging vs. Fidelity International Growth | Baron Emerging vs. Parnassus Mid Cap | Baron Emerging vs. Df Dent Midcap | Baron Emerging vs. Amg Timessquare 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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