Correlation Between Baron Select and China Emerging
Can any of the company-specific risk be diversified away by investing in both Baron Select and China Emerging 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 Select and China Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Select Funds and China Emerging Leaders, you can compare the effects of market volatilities on Baron Select and China Emerging 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 Select with a short position of China Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Select and China Emerging.
Diversification Opportunities for Baron Select and China Emerging
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baron and China is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Baron Select Funds and China Emerging Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Emerging Leaders and Baron Select 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 Select Funds are associated (or correlated) with China Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Emerging Leaders has no effect on the direction of Baron Select i.e., Baron Select and China Emerging go up and down completely randomly.
Pair Corralation between Baron Select and China Emerging
Assuming the 90 days horizon Baron Select Funds is expected to generate 3.21 times more return on investment than China Emerging. However, Baron Select is 3.21 times more volatile than China Emerging Leaders. It trades about 0.14 of its potential returns per unit of risk. China Emerging Leaders is currently generating about 0.02 per unit of risk. If you would invest 638.00 in Baron Select Funds on September 25, 2024 and sell it today you would earn a total of 722.00 from holding Baron Select Funds or generate 113.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Baron Select Funds vs. China Emerging Leaders
Performance |
Timeline |
Baron Select Funds |
China Emerging Leaders |
Baron Select and China Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Baron Select and China Emerging
The main advantage of trading using opposite Baron Select and China Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Select position performs unexpectedly, China Emerging 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 China Emerging will offset losses from the drop in China Emerging's long position.Baron Select vs. Veea Inc | Baron Select vs. VivoPower International PLC | Baron Select vs. Baron Real Estate | Baron Select vs. Baron Real Estate |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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