Correlation Between Saat Market and Baron Focused
Can any of the company-specific risk be diversified away by investing in both Saat Market and Baron Focused 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 Saat Market and Baron Focused into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saat Market Growth and Baron Focused Growth, you can compare the effects of market volatilities on Saat Market and Baron Focused 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 Saat Market with a short position of Baron Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Market and Baron Focused.
Diversification Opportunities for Saat Market and Baron Focused
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Saat and Baron is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Saat Market Growth and Baron Focused Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Focused Growth and Saat Market 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 Saat Market Growth are associated (or correlated) with Baron Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Focused Growth has no effect on the direction of Saat Market i.e., Saat Market and Baron Focused go up and down completely randomly.
Pair Corralation between Saat Market and Baron Focused
Assuming the 90 days horizon Saat Market is expected to generate 2.31 times less return on investment than Baron Focused. But when comparing it to its historical volatility, Saat Market Growth is 2.17 times less risky than Baron Focused. It trades about 0.08 of its potential returns per unit of risk. Baron Focused Growth is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,261 in Baron Focused Growth on November 9, 2024 and sell it today you would earn a total of 1,682 from holding Baron Focused Growth or generate 51.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saat Market Growth vs. Baron Focused Growth
Performance |
| Timeline |
| Saat Market Growth |
| Baron Focused Growth |
Saat Market and Baron Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saat Market and Baron Focused
The main advantage of trading using opposite Saat Market and Baron Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Market position performs unexpectedly, Baron Focused 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 Focused will offset losses from the drop in Baron Focused's long position.| Saat Market vs. Great West Government Mortgage | Saat Market vs. Fidelity Series Government | Saat Market vs. Ridgeworth Seix Government | Saat Market vs. Wesmark Government Bond |
| Baron Focused vs. Goldman Sachs Short | Baron Focused vs. Rational Special Situations | Baron Focused vs. Dreyfusstandish Global Fixed | Baron Focused vs. Dreyfusstandish Global Fixed |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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