Correlation Between Simt High and Baron Health
Can any of the company-specific risk be diversified away by investing in both Simt High 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 Simt High and Baron Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt High Yield and Baron Health Care, you can compare the effects of market volatilities on Simt High 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 Simt High with a short position of Baron Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt High and Baron Health.
Diversification Opportunities for Simt High and Baron Health
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Simt and Baron is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Simt High Yield 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 Simt 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 Simt High Yield 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 Simt High i.e., Simt High and Baron Health go up and down completely randomly.
Pair Corralation between Simt High and Baron Health
Assuming the 90 days horizon Simt High Yield is expected to generate 0.18 times more return on investment than Baron Health. However, Simt High Yield is 5.53 times less risky than Baron Health. It trades about 0.18 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 538.00 in Simt High Yield on August 30, 2024 and sell it today you would earn a total of 4.00 from holding Simt High Yield or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simt High Yield vs. Baron Health Care
Performance |
| Timeline |
| Simt High Yield |
| Baron Health Care |
Simt High and Baron Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simt High and Baron Health
The main advantage of trading using opposite Simt High and Baron Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt High 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.| Simt High vs. Mfs Technology Fund | Simt High vs. Firsthand Technology Opportunities | Simt High vs. Dreyfus Technology Growth | Simt High vs. Fidelity Advisor Technology |
| Baron Health vs. Fidelity Advisor Technology | Baron Health vs. Fidelity Advisor Biotechnology | Baron Health vs. Fidelity Advisor Financial | Baron Health vs. Fidelity Advisor Utilities |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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