Correlation Between Performance Trust and Baron Health
Can any of the company-specific risk be diversified away by investing in both Performance Trust and Baron Health 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 Performance Trust and Baron Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Performance Trust Strategic and Baron Health Care, you can compare the effects of market volatilities on Performance Trust and Baron Health 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 Performance Trust with a short position of Baron Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Trust and Baron Health.
Diversification Opportunities for Performance Trust and Baron Health
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PERFORMANCE and Baron is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Performance Trust Strategic and Baron Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Health Care and Performance Trust 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 Performance Trust Strategic are associated (or correlated) with Baron Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Health Care has no effect on the direction of Performance Trust i.e., Performance Trust and Baron Health go up and down completely randomly.
Pair Corralation between Performance Trust and Baron Health
Assuming the 90 days horizon Performance Trust Strategic is expected to generate 0.39 times more return on investment than Baron Health. However, Performance Trust Strategic is 2.57 times less risky than Baron Health. It trades about 0.11 of its potential returns per unit of risk. Baron Health Care is currently generating about -0.01 per unit of risk. If you would invest 1,975 in Performance Trust Strategic on August 30, 2024 and sell it today you would earn a total of 19.00 from holding Performance Trust Strategic or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Performance Trust Strategic vs. Baron Health Care
Performance |
| Timeline |
| Performance Trust |
| Baron Health Care |
Performance Trust and Baron Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Trust and Baron Health
The main advantage of trading using opposite Performance Trust and Baron Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Trust position performs unexpectedly, Baron Health 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 Health will offset losses from the drop in Baron Health's long position.| Performance Trust vs. Alphacentric Income Opportunities | Performance Trust vs. Performance Trust Municipal | Performance Trust vs. Guggenheim Total Return | Performance Trust vs. Pimco Income Fund |
| Baron Health vs. Performance Trust Strategic | Baron Health vs. Mirova Global Green | Baron Health vs. Multisector Bond Sma | Baron Health vs. Astor Longshort Fund |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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