Correlation Between Arrow Managed and Baron Health
Can any of the company-specific risk be diversified away by investing in both Arrow Managed 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 Arrow Managed and Baron Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Managed Futures and Baron Health Care, you can compare the effects of market volatilities on Arrow Managed 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 Arrow Managed with a short position of Baron Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Baron Health.
Diversification Opportunities for Arrow Managed and Baron Health
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arrow and Baron is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures 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 Arrow Managed 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 Arrow Managed Futures 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 Arrow Managed i.e., Arrow Managed and Baron Health go up and down completely randomly.
Pair Corralation between Arrow Managed and Baron Health
Assuming the 90 days horizon Arrow Managed Futures is expected to generate 1.29 times more return on investment than Baron Health. However, Arrow Managed is 1.29 times more volatile than Baron Health Care. It trades about 0.05 of its potential returns per unit of risk. Baron Health Care is currently generating about -0.06 per unit of risk. If you would invest 576.00 in Arrow Managed Futures on October 17, 2024 and sell it today you would earn a total of 6.00 from holding Arrow Managed Futures or generate 1.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Arrow Managed Futures vs. Baron Health Care
Performance |
| Timeline |
| Arrow Managed Futures |
| Baron Health Care |
Arrow Managed and Baron Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and Baron Health
The main advantage of trading using opposite Arrow Managed and Baron Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed 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.| Arrow Managed vs. Transamerica Mlp Energy | Arrow Managed vs. Clearbridge Energy Mlp | Arrow Managed vs. Short Oil Gas | Arrow Managed vs. Alpsalerian Energy Infrastructure |
| Baron Health vs. Franklin High Yield | Baron Health vs. Blrc Sgy Mnp | Baron Health vs. Maryland Tax Free Bond | Baron Health vs. Barings 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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