Correlation Between NYSE Composite and Baron Asset
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Baron Asset 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 NYSE Composite and Baron Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Baron Asset Fund, you can compare the effects of market volatilities on NYSE Composite and Baron Asset 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 NYSE Composite with a short position of Baron Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Baron Asset.
Diversification Opportunities for NYSE Composite and Baron Asset
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Baron is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Baron Asset Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Asset Fund and NYSE Composite 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 NYSE Composite are associated (or correlated) with Baron Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Asset Fund has no effect on the direction of NYSE Composite i.e., NYSE Composite and Baron Asset go up and down completely randomly.
Pair Corralation between NYSE Composite and Baron Asset
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.49 times less return on investment than Baron Asset. But when comparing it to its historical volatility, NYSE Composite is 1.56 times less risky than Baron Asset. It trades about 0.24 of its potential returns per unit of risk. Baron Asset Fund is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 10,806 in Baron Asset Fund on August 28, 2024 and sell it today you would earn a total of 552.00 from holding Baron Asset Fund or generate 5.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Baron Asset Fund
Performance |
| Timeline |
NYSE Composite and Baron Asset Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Baron Asset Fund
Pair trading matchups for Baron Asset
Pair Trading with NYSE Composite and Baron Asset
The main advantage of trading using opposite NYSE Composite and Baron Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Baron Asset 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 Asset will offset losses from the drop in Baron Asset's long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| Baron Asset vs. Baron Growth Fund | Baron Asset vs. Baron Small Cap | Baron Asset vs. Janus Global Research | Baron Asset vs. Baron Opportunity Fund |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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