Correlation Between Nasdaq 100 and Baron Small
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Baron Small 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 Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 Fund Investor and Baron Small Cap, you can compare the effects of market volatilities on Nasdaq 100 and Baron Small 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 Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Baron Small.
Diversification Opportunities for Nasdaq 100 and Baron Small
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nasdaq and Baron is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Fund Investor and Baron Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Small Cap 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 Investor are associated (or correlated) with Baron Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Small Cap has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Baron Small go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Baron Small
Assuming the 90 days horizon Nasdaq 100 Fund Investor is expected to generate 1.08 times more return on investment than Baron Small. However, Nasdaq 100 is 1.08 times more volatile than Baron Small Cap. It trades about -0.16 of its potential returns per unit of risk. Baron Small Cap is currently generating about -0.24 per unit of risk. If you would invest 8,559 in Nasdaq 100 Fund Investor on December 23, 2024 and sell it today you would lose (827.00) from holding Nasdaq 100 Fund Investor or give up 9.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 Fund Investor vs. Baron Small Cap
Performance |
| Timeline |
| Nasdaq 100 Fund |
| Baron Small Cap |
Nasdaq 100 and Baron Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Baron Small
The main advantage of trading using opposite Nasdaq 100 and Baron Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Baron Small 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 Small will offset losses from the drop in Baron Small's long position.| Nasdaq 100 vs. Global Real Estate | Nasdaq 100 vs. Redwood Real Estate | Nasdaq 100 vs. Rreef Property Trust | Nasdaq 100 vs. Invesco Real Estate |
| Baron Small vs. Baron Growth Fund | Baron Small vs. Baron Asset Fund | Baron Small vs. Baron Partners Fund | Baron Small vs. Nasdaq 100 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |