Correlation Between NYSE Composite and Baron Select
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Baron Select 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 Select 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 Select Funds, you can compare the effects of market volatilities on NYSE Composite and Baron Select 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 Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Baron Select.
Diversification Opportunities for NYSE Composite and Baron Select
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Baron is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Baron Select Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Select Funds 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 Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Select Funds has no effect on the direction of NYSE Composite i.e., NYSE Composite and Baron Select go up and down completely randomly.
Pair Corralation between NYSE Composite and Baron Select
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.94 times less return on investment than Baron Select. But when comparing it to its historical volatility, NYSE Composite is 2.22 times less risky than Baron Select. It trades about 0.11 of its potential returns per unit of risk. Baron Select Funds is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,012 in Baron Select Funds on August 25, 2024 and sell it today you would earn a total of 284.00 from holding Baron Select Funds or generate 28.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Baron Select Funds
Performance |
| Timeline |
NYSE Composite and Baron Select Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Baron Select Funds
Pair trading matchups for Baron Select
Pair Trading with NYSE Composite and Baron Select
The main advantage of trading using opposite NYSE Composite and Baron Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Baron Select 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 Select will offset losses from the drop in Baron Select's long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| Baron Select vs. VEEA | Baron Select vs. VivoPower International PLC | Baron Select vs. WEBTOON Entertainment Common | Baron Select vs. Baron Real Estate |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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