Correlation Between Prudential High and Baron Growth
Can any of the company-specific risk be diversified away by investing in both Prudential High and Baron Growth 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 Prudential High and Baron Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential High Yield and Baron Growth Fund, you can compare the effects of market volatilities on Prudential High and Baron Growth 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 Prudential High with a short position of Baron Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential High and Baron Growth.
Diversification Opportunities for Prudential High and Baron Growth
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Prudential and Baron is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Prudential High Yield and Baron Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Growth and Prudential High 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 Prudential High Yield are associated (or correlated) with Baron Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Growth has no effect on the direction of Prudential High i.e., Prudential High and Baron Growth go up and down completely randomly.
Pair Corralation between Prudential High and Baron Growth
Assuming the 90 days horizon Prudential High Yield is expected to generate 0.26 times more return on investment than Baron Growth. However, Prudential High Yield is 3.79 times less risky than Baron Growth. It trades about 0.14 of its potential returns per unit of risk. Baron Growth Fund is currently generating about 0.01 per unit of risk. If you would invest 395.00 in Prudential High Yield on November 9, 2024 and sell it today you would earn a total of 86.00 from holding Prudential High Yield or generate 21.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential High Yield vs. Baron Growth Fund
Performance |
| Timeline |
| Prudential High Yield |
| Baron Growth |
Prudential High and Baron Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential High and Baron Growth
The main advantage of trading using opposite Prudential High and Baron Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential High position performs unexpectedly, Baron Growth 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 Growth will offset losses from the drop in Baron Growth's long position.| Prudential High vs. Fidelity Advisor Financial | Prudential High vs. John Hancock Financial | Prudential High vs. Rmb Mendon Financial | Prudential High vs. Davis Financial Fund |
| Baron Growth vs. Sp Smallcap 600 | Baron Growth vs. Nuveen Small Cap | Baron Growth vs. Needham Small Cap | Baron Growth vs. Rbc 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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