Correlation Between Cref Money and Baron Health
Can any of the company-specific risk be diversified away by investing in both Cref Money 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 Cref Money and Baron Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cref Money Market and Baron Health Care, you can compare the effects of market volatilities on Cref Money 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 Cref Money with a short position of Baron Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Money and Baron Health.
Diversification Opportunities for Cref Money and Baron Health
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cref and Baron is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Cref Money Market 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 Cref Money 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 Cref Money Market 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 Cref Money i.e., Cref Money and Baron Health go up and down completely randomly.
Pair Corralation between Cref Money and Baron Health
Assuming the 90 days trading horizon Cref Money is expected to generate 1.4 times less return on investment than Baron Health. But when comparing it to its historical volatility, Cref Money Market is 32.9 times less risky than Baron Health. It trades about 0.8 of its potential returns per unit of risk. Baron Health Care is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,792 in Baron Health Care on September 12, 2024 and sell it today you would earn a total of 234.00 from holding Baron Health Care or generate 13.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.17% |
| Values | Daily Returns |
Cref Money Market vs. Baron Health Care
Performance |
| Timeline |
| Cref Money Market |
| Baron Health Care |
Cref Money and Baron Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cref Money and Baron Health
The main advantage of trading using opposite Cref Money and Baron Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Money 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.| Cref Money vs. Vanguard Total Stock | Cref Money vs. Vanguard 500 Index | Cref Money vs. Vanguard Total Stock | Cref Money vs. Vanguard Total Stock |
| Baron Health vs. Aig Government Money | Baron Health vs. Cref Money Market | Baron Health vs. John Hancock Money | Baron Health vs. The Gabelli Money |
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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