Correlation Between International Value and Baron Emerging
Can any of the company-specific risk be diversified away by investing in both International Value 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 International Value and Baron Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Value Fund and Baron Emerging Markets, you can compare the effects of market volatilities on International Value 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 International Value with a short position of Baron Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Value and Baron Emerging.
Diversification Opportunities for International Value and Baron Emerging
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between International and Baron is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding International Value Fund 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 International Value 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 International Value Fund 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 International Value i.e., International Value and Baron Emerging go up and down completely randomly.
Pair Corralation between International Value and Baron Emerging
Assuming the 90 days horizon International Value Fund is expected to generate 0.97 times more return on investment than Baron Emerging. However, International Value Fund is 1.04 times less risky than Baron Emerging. It trades about 0.07 of its potential returns per unit of risk. Baron Emerging Markets is currently generating about 0.05 per unit of risk. If you would invest 703.00 in International Value Fund on December 1, 2024 and sell it today you would earn a total of 220.00 from holding International Value Fund or generate 31.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Value Fund vs. Baron Emerging Markets
Performance |
| Timeline |
| International Value |
| Baron Emerging Markets |
International Value and Baron Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Value and Baron Emerging
The main advantage of trading using opposite International Value and Baron Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Value 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.| International Value vs. Mid Cap Value | International Value vs. Equity Growth Fund | International Value vs. Income Growth Fund | International Value vs. Emerging Markets Fund |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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