Correlation Between Scharf Fund and Baron Health
Can any of the company-specific risk be diversified away by investing in both Scharf 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 Scharf 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 Scharf Fund Retail and Baron Health Care, you can compare the effects of market volatilities on Scharf 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 Scharf Fund with a short position of Baron Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Fund and Baron Health.
Diversification Opportunities for Scharf Fund and Baron Health
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Scharf and Baron is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Fund Retail 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 Scharf 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 Scharf Fund Retail 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 Scharf Fund i.e., Scharf Fund and Baron Health go up and down completely randomly.
Pair Corralation between Scharf Fund and Baron Health
Assuming the 90 days horizon Scharf Fund Retail is expected to under-perform the Baron Health. In addition to that, Scharf Fund is 1.4 times more volatile than Baron Health Care. It trades about -0.34 of its total potential returns per unit of risk. Baron Health Care is currently generating about -0.19 per unit of volatility. If you would invest 2,033 in Baron Health Care on October 9, 2024 and sell it today you would lose (69.00) from holding Baron Health Care or give up 3.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Scharf Fund Retail vs. Baron Health Care
Performance |
| Timeline |
| Scharf Fund Retail |
| Baron Health Care |
Scharf Fund and Baron Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Fund and Baron Health
The main advantage of trading using opposite Scharf Fund and Baron Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf 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.| Scharf Fund vs. Cardinal Small Cap | Scharf Fund vs. Lebenthal Lisanti Small | Scharf Fund vs. Rbc Small Cap | Scharf Fund vs. Ab Small Cap |
| Baron Health vs. Leader Short Term Bond | Baron Health vs. Pioneer Amt Free Municipal | Baron Health vs. Bbh Intermediate Municipal | Baron Health vs. Ab Global Bond |
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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