Correlation Between NYSE Composite and Baron Opportunity
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Baron Opportunity 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 Opportunity 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 Opportunity Fund, you can compare the effects of market volatilities on NYSE Composite and Baron Opportunity 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 Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Baron Opportunity.
Diversification Opportunities for NYSE Composite and Baron Opportunity
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Baron is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Baron Opportunity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Opportunity 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 Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Opportunity has no effect on the direction of NYSE Composite i.e., NYSE Composite and Baron Opportunity go up and down completely randomly.
Pair Corralation between NYSE Composite and Baron Opportunity
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.85 times less return on investment than Baron Opportunity. But when comparing it to its historical volatility, NYSE Composite is 2.1 times less risky than Baron Opportunity. It trades about 0.11 of its potential returns per unit of risk. Baron Opportunity Fund is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,551 in Baron Opportunity Fund on November 9, 2024 and sell it today you would earn a total of 1,430 from holding Baron Opportunity Fund or generate 40.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Baron Opportunity Fund
Performance |
| Timeline |
NYSE Composite and Baron Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Baron Opportunity Fund
Pair trading matchups for Baron Opportunity
Pair Trading with NYSE Composite and Baron Opportunity
The main advantage of trading using opposite NYSE Composite and Baron Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Baron Opportunity 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 Opportunity will offset losses from the drop in Baron Opportunity's long position.| NYSE Composite vs. Integrated Media Technology | NYSE Composite vs. Custom Truck One | NYSE Composite vs. Funko Inc | NYSE Composite vs. Multi Ways Holdings |
| Baron Opportunity vs. Baron Partners Fund | Baron Opportunity vs. Baron Global Advantage | Baron Opportunity vs. Baron Fifth Avenue | Baron Opportunity vs. Baron Focused Growth |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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