Correlation Between Microsoft and Baron Focused
Can any of the company-specific risk be diversified away by investing in both Microsoft and Baron Focused 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 Microsoft and Baron Focused into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Baron Focused Growth, you can compare the effects of market volatilities on Microsoft and Baron Focused 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 Microsoft with a short position of Baron Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Baron Focused.
Diversification Opportunities for Microsoft and Baron Focused
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Microsoft and Baron is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Baron Focused Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Focused Growth and Microsoft 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 Microsoft are associated (or correlated) with Baron Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Focused Growth has no effect on the direction of Microsoft i.e., Microsoft and Baron Focused go up and down completely randomly.
Pair Corralation between Microsoft and Baron Focused
Given the investment horizon of 90 days Microsoft is expected to generate 9.7 times less return on investment than Baron Focused. In addition to that, Microsoft is 1.48 times more volatile than Baron Focused Growth. It trades about 0.02 of its total potential returns per unit of risk. Baron Focused Growth is currently generating about 0.32 per unit of volatility. If you would invest 4,411 in Baron Focused Growth on August 29, 2024 and sell it today you would earn a total of 374.00 from holding Baron Focused Growth or generate 8.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Baron Focused Growth
Performance |
| Timeline |
| Microsoft |
| Baron Focused Growth |
Microsoft and Baron Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Baron Focused
The main advantage of trading using opposite Microsoft and Baron Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Baron Focused 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 Focused will offset losses from the drop in Baron Focused's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
| Baron Focused vs. Baron Real Estate | Baron Focused vs. Baron Real Estate | Baron Focused vs. Baron Real Estate | Baron Focused vs. Baron Small Cap |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |