Correlation Between Value Line and Baron Growth
Can any of the company-specific risk be diversified away by investing in both Value Line 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 Value Line and Baron Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Value Line Mid and Baron Growth Fund, you can compare the effects of market volatilities on Value Line 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 Value Line with a short position of Baron Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Value Line and Baron Growth.
Diversification Opportunities for Value Line and Baron Growth
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Value and Baron is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Value Line Mid and Baron Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Growth and Value Line 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 Value Line Mid 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 Value Line i.e., Value Line and Baron Growth go up and down completely randomly.
Pair Corralation between Value Line and Baron Growth
Assuming the 90 days horizon Value Line Mid is expected to under-perform the Baron Growth. In addition to that, Value Line is 1.08 times more volatile than Baron Growth Fund. It trades about -0.12 of its total potential returns per unit of risk. Baron Growth Fund is currently generating about -0.03 per unit of volatility. If you would invest 10,461 in Baron Growth Fund on September 12, 2024 and sell it today you would lose (51.00) from holding Baron Growth Fund or give up 0.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Value Line Mid vs. Baron Growth Fund
Performance |
| Timeline |
| Value Line Mid |
| Baron Growth |
Value Line and Baron Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Value Line and Baron Growth
The main advantage of trading using opposite Value Line and Baron Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Value Line 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.| Value Line vs. Baron Growth Fund | Value Line vs. Baron Small Cap | Value Line vs. Janus Global Research | Value Line vs. Baron Opportunity Fund |
| Baron Growth vs. Baron Small Cap | Baron Growth vs. Janus Global Research | Baron Growth vs. Baron Opportunity Fund | Baron Growth vs. Oakmark 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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