Baron Select Correlations
BTEEX Fund | USD 10.34 0.12 1.17% |
The correlation of Baron Select is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Baron Select moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Baron Select Funds moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Very weak diversification
The correlation between Baron Select Funds and NYA is 0.52 (i.e., Very weak diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Baron Select Funds and NYA in the same portfolio, assuming nothing else is changed.
Baron |
The ability to find closely correlated positions to Baron Select could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Baron Select when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Baron Select - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Baron Select Funds to buy it.
Moving against Baron Mutual Fund
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