Correlation Between Nasdaq 100 and Baron Growth
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 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 Nasdaq 100 and Baron Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 Fund Class and Baron Growth Fund, you can compare the effects of market volatilities on Nasdaq 100 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 Nasdaq 100 with a short position of Baron Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Baron Growth.
Diversification Opportunities for Nasdaq 100 and Baron Growth
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nasdaq and Baron is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Fund Class and Baron Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Growth and Nasdaq 100 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 Nasdaq 100 Fund Class 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 Nasdaq 100 i.e., Nasdaq 100 and Baron Growth go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Baron Growth
Assuming the 90 days horizon Nasdaq 100 is expected to generate 1.39 times less return on investment than Baron Growth. In addition to that, Nasdaq 100 is 1.17 times more volatile than Baron Growth Fund. It trades about 0.19 of its total potential returns per unit of risk. Baron Growth Fund is currently generating about 0.31 per unit of volatility. If you would invest 10,586 in Baron Growth Fund on September 4, 2024 and sell it today you would earn a total of 611.00 from holding Baron Growth Fund or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Nasdaq 100 Fund Class vs. Baron Growth Fund
Performance |
| Timeline |
| Nasdaq 100 Fund |
| Baron Growth |
Nasdaq 100 and Baron Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Baron Growth
The main advantage of trading using opposite Nasdaq 100 and Baron Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 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.| Nasdaq 100 vs. Nasdaq 100 Fund Class | Nasdaq 100 vs. Nasdaq 100 Fund Class | Nasdaq 100 vs. Nasdaq 100 2x Strategy | Nasdaq 100 vs. Dow 2x Strategy |
| Baron Growth vs. Ab Value Fund | Baron Growth vs. Nasdaq 100 Fund Class | Baron Growth vs. Eic Value Fund | Baron Growth vs. Balanced Fund Investor |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |