Correlation Between General Money and Baron Health
Can any of the company-specific risk be diversified away by investing in both General Money and Baron Health 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 General Money and Baron Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Money Market and Baron Health Care, you can compare the effects of market volatilities on General Money and Baron Health 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 General Money with a short position of Baron Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Money and Baron Health.
Diversification Opportunities for General Money and Baron Health
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between General and Baron is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding General Money Market and Baron Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Health Care and General Money 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 General Money Market are associated (or correlated) with Baron Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Health Care has no effect on the direction of General Money i.e., General Money and Baron Health go up and down completely randomly.
Pair Corralation between General Money and Baron Health
If you would invest 100.00 in General Money Market on September 25, 2024 and sell it today you would earn a total of 0.00 from holding General Money Market or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
General Money Market vs. Baron Health Care
Performance |
Timeline |
General Money Market |
Baron Health Care |
General Money and Baron Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with General Money and Baron Health
The main advantage of trading using opposite General Money and Baron Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Money position performs unexpectedly, Baron Health 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 Health will offset losses from the drop in Baron Health's long position.General Money vs. Vanguard Total Stock | General Money vs. Vanguard 500 Index | General Money vs. Vanguard Total Stock | General Money vs. Vanguard Total Stock |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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