Correlation Between Siit High and Baron Small
Can any of the company-specific risk be diversified away by investing in both Siit High 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 Siit High and Baron Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit High Yield and Baron Small Cap, you can compare the effects of market volatilities on Siit High 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 Siit High with a short position of Baron Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit High and Baron Small.
Diversification Opportunities for Siit High and Baron Small
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Siit and Baron is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Siit High Yield 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 Siit High 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 Siit High Yield 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 Siit High i.e., Siit High and Baron Small go up and down completely randomly.
Pair Corralation between Siit High and Baron Small
Assuming the 90 days horizon Siit High is expected to generate 3.74 times less return on investment than Baron Small. But when comparing it to its historical volatility, Siit High Yield is 5.49 times less risky than Baron Small. It trades about 0.23 of its potential returns per unit of risk. Baron Small Cap is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3,559 in Baron Small Cap on September 12, 2024 and sell it today you would earn a total of 389.00 from holding Baron Small Cap or generate 10.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
Siit High Yield vs. Baron Small Cap
Performance |
| Timeline |
| Siit High Yield |
| Baron Small Cap |
Siit High and Baron Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit High and Baron Small
The main advantage of trading using opposite Siit High and Baron Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit High 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.| Siit High vs. Calvert High Yield | Siit High vs. Metropolitan West High | Siit High vs. Artisan High Income | Siit High vs. Pace High Yield |
| Baron Small vs. Baird Strategic Municipal | Baron Small vs. Transamerica Intermediate Muni | Baron Small vs. Franklin High Yield | Baron Small vs. Ab Impact Municipal |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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