Correlation Between Small Company and Baron New
Can any of the company-specific risk be diversified away by investing in both Small Company and Baron New 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 Small Company and Baron New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Pany Growth and Baron New Asia, you can compare the effects of market volatilities on Small Company and Baron New 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 Small Company with a short position of Baron New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Company and Baron New.
Diversification Opportunities for Small Company and Baron New
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Small and Baron is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Small Pany Growth and Baron New Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron New Asia and Small Company 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 Small Pany Growth are associated (or correlated) with Baron New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron New Asia has no effect on the direction of Small Company i.e., Small Company and Baron New go up and down completely randomly.
Pair Corralation between Small Company and Baron New
Assuming the 90 days horizon Small Pany Growth is expected to generate 2.11 times more return on investment than Baron New. However, Small Company is 2.11 times more volatile than Baron New Asia. It trades about 0.15 of its potential returns per unit of risk. Baron New Asia is currently generating about 0.05 per unit of risk. If you would invest 1,139 in Small Pany Growth on September 3, 2024 and sell it today you would earn a total of 530.00 from holding Small Pany Growth or generate 46.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.67% |
| Values | Daily Returns |
Small Pany Growth vs. Baron New Asia
Performance |
| Timeline |
| Small Pany Growth |
| Baron New Asia |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Small Company and Baron New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Company and Baron New
The main advantage of trading using opposite Small Company and Baron New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Company position performs unexpectedly, Baron New 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 New will offset losses from the drop in Baron New's long position.| Small Company vs. Mid Cap Growth | Small Company vs. Growth Portfolio Class | Small Company vs. Morgan Stanley Multi | Small Company vs. Emerging Markets Portfolio |
| Baron New vs. Commonwealth Global Fund | Baron New vs. Nationwide Global Equity | Baron New vs. 361 Global Longshort | Baron New vs. Doubleline 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |