Correlation Between Baron Health and Pioneer Disciplined

Can any of the company-specific risk be diversified away by investing in both Baron Health and Pioneer Disciplined 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 Baron Health and Pioneer Disciplined into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Baron Health Care and Pioneer Disciplined Growth, you can compare the effects of market volatilities on Baron Health and Pioneer Disciplined 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 Baron Health with a short position of Pioneer Disciplined. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and Pioneer Disciplined.

Diversification Opportunities for Baron Health and Pioneer Disciplined

-0.38

Correlation Coefficient

Baron Health  Pioneer Disciplined

Very good diversification

The 3 months correlation between Baron and Pioneer is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care and Pioneer Disciplined Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Disciplined and Baron Health 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 Baron Health Care are associated (or correlated) with Pioneer Disciplined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Disciplined has no effect on the direction of Baron Health i.e., Baron Health and Pioneer Disciplined go up and down completely randomly.

Pair Corralation between Baron Health and Pioneer Disciplined

Assuming the 90 days horizon Baron Health is expected to generate 2.6 times less return on investment than Pioneer Disciplined. But when comparing it to its historical volatility, Baron Health Care is 1.09 times less risky than Pioneer Disciplined. It trades about 0.03 of its potential returns per unit of risk. Pioneer Disciplined Growth is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,411  in Pioneer Disciplined Growth on September 3, 2024 and sell it today you would earn a total of  599.00  from holding Pioneer Disciplined Growth or generate 42.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Baron Health Care  vs.  Pioneer Disciplined Growth

Baron Health Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baron Health Care has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical indicators, Baron Health is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pioneer Disciplined

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pioneer Disciplined Growth are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Pioneer Disciplined is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Baron Health and Pioneer Disciplined

The main advantage of trading using opposite Baron Health and Pioneer Disciplined positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health position performs unexpectedly, Pioneer Disciplined 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 Pioneer Disciplined will offset losses from the drop in Pioneer Disciplined's long position.

The idea behind Baron Health Care and Pioneer Disciplined Growth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 CEOs Directory module to screen CEOs from public companies around the world.