Correlation Between Pace High and Baron Fintech
Can any of the company-specific risk be diversified away by investing in both Pace High and Baron Fintech 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 Pace High and Baron Fintech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace High Yield and Baron Fintech, you can compare the effects of market volatilities on Pace High and Baron Fintech 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 Pace High with a short position of Baron Fintech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace High and Baron Fintech.
Diversification Opportunities for Pace High and Baron Fintech
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pace and Baron is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Pace High Yield and Baron Fintech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Fintech and Pace 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 Pace High Yield are associated (or correlated) with Baron Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Fintech has no effect on the direction of Pace High i.e., Pace High and Baron Fintech go up and down completely randomly.
Pair Corralation between Pace High and Baron Fintech
Assuming the 90 days horizon Pace High is expected to generate 11.01 times less return on investment than Baron Fintech. But when comparing it to its historical volatility, Pace High Yield is 10.5 times less risky than Baron Fintech. It trades about 0.43 of its potential returns per unit of risk. Baron Fintech is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 1,693 in Baron Fintech on September 3, 2024 and sell it today you would earn a total of 173.00 from holding Baron Fintech or generate 10.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace High Yield vs. Baron Fintech
Performance |
| Timeline |
| Pace High Yield |
| Baron Fintech |
Pace High and Baron Fintech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace High and Baron Fintech
The main advantage of trading using opposite Pace High and Baron Fintech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace High position performs unexpectedly, Baron Fintech 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 Fintech will offset losses from the drop in Baron Fintech's long position.| Pace High vs. Sarofim Equity | Pace High vs. Ultra Short Fixed Income | Pace High vs. Artisan Select Equity | Pace High vs. Cutler Equity |
| Baron Fintech vs. Hood River New | Baron Fintech vs. Franklin Lifesmart 2050 | Baron Fintech vs. T Rowe Price | Baron Fintech vs. Legg Mason Partners |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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