Correlation Between Touchstone Large and Baron Growth
Can any of the company-specific risk be diversified away by investing in both Touchstone Large 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 Touchstone Large and Baron Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Large Cap and Baron Growth Fund, you can compare the effects of market volatilities on Touchstone Large 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 Touchstone Large with a short position of Baron Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Large and Baron Growth.
Diversification Opportunities for Touchstone Large and Baron Growth
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Touchstone and Baron is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Large Cap and Baron Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Growth and Touchstone Large 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 Touchstone Large Cap 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 Touchstone Large i.e., Touchstone Large and Baron Growth go up and down completely randomly.
Pair Corralation between Touchstone Large and Baron Growth
Assuming the 90 days horizon Touchstone Large Cap is expected to generate 0.87 times more return on investment than Baron Growth. However, Touchstone Large Cap is 1.15 times less risky than Baron Growth. It trades about 0.37 of its potential returns per unit of risk. Baron Growth Fund is currently generating about 0.31 per unit of risk. If you would invest 1,947 in Touchstone Large Cap on September 4, 2024 and sell it today you would earn a total of 116.00 from holding Touchstone Large Cap or generate 5.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Large Cap vs. Baron Growth Fund
Performance |
| Timeline |
| Touchstone Large Cap |
| Baron Growth |
Touchstone Large and Baron Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Large and Baron Growth
The main advantage of trading using opposite Touchstone Large and Baron Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Large 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.| Touchstone Large vs. Champlain Mid Cap | Touchstone Large vs. Pace Smallmedium Growth | Touchstone Large vs. Mid Cap Growth | Touchstone Large vs. T Rowe Price |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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