Correlation Between Pimco Trends and Baron Opportunity
Can any of the company-specific risk be diversified away by investing in both Pimco Trends 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 Pimco Trends and Baron Opportunity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Trends Managed and Baron Opportunity Fund, you can compare the effects of market volatilities on Pimco Trends 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 Pimco Trends with a short position of Baron Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Trends and Baron Opportunity.
Diversification Opportunities for Pimco Trends and Baron Opportunity
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pimco and Baron is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Trends Managed and Baron Opportunity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Opportunity and Pimco Trends 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 Pimco Trends Managed 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 Pimco Trends i.e., Pimco Trends and Baron Opportunity go up and down completely randomly.
Pair Corralation between Pimco Trends and Baron Opportunity
Assuming the 90 days horizon Pimco Trends is expected to generate 3.81 times less return on investment than Baron Opportunity. But when comparing it to its historical volatility, Pimco Trends Managed is 1.78 times less risky than Baron Opportunity. It trades about 0.16 of its potential returns per unit of risk. Baron Opportunity Fund is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 4,765 in Baron Opportunity Fund on September 1, 2024 and sell it today you would earn a total of 424.00 from holding Baron Opportunity Fund or generate 8.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Pimco Trends Managed vs. Baron Opportunity Fund
Performance |
| Timeline |
| Pimco Trends Managed |
| Baron Opportunity |
Pimco Trends and Baron Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Trends and Baron Opportunity
The main advantage of trading using opposite Pimco Trends and Baron Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Trends 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.| Pimco Trends vs. Asg Managed Futures | Pimco Trends vs. Asg Managed Futures | Pimco Trends vs. Aqr Managed Futures | Pimco Trends vs. iMGP DBi Managed |
| Baron Opportunity vs. Baron Real Estate | Baron Opportunity vs. Baron Real Estate | Baron Opportunity vs. Baron Real Estate | Baron Opportunity vs. Baron 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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