Correlation Between Baron International and Barings Emerging
Can any of the company-specific risk be diversified away by investing in both Baron International and Barings 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 International and Barings Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron International Growth and Barings Emerging Markets, you can compare the effects of market volatilities on Baron International and Barings 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 International with a short position of Barings Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron International and Barings Emerging.
Diversification Opportunities for Baron International and Barings Emerging
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baron and Barings is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Baron International Growth and Barings Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Emerging Markets and Baron International 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 International Growth are associated (or correlated) with Barings Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Emerging Markets has no effect on the direction of Baron International i.e., Baron International and Barings Emerging go up and down completely randomly.
Pair Corralation between Baron International and Barings Emerging
Assuming the 90 days horizon Baron International Growth is expected to generate 1.94 times more return on investment than Barings Emerging. However, Baron International is 1.94 times more volatile than Barings Emerging Markets. It trades about 0.1 of its potential returns per unit of risk. Barings Emerging Markets is currently generating about 0.02 per unit of risk. If you would invest 2,584 in Baron International Growth on March 10, 2024 and sell it today you would earn a total of 36.00 from holding Baron International Growth or generate 1.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 95.45% |
Values | Daily Returns |
Baron International Growth vs. Barings Emerging Markets
Performance |
Timeline |
Baron International |
Barings Emerging Markets |
Baron International and Barings Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Baron International and Barings Emerging
The main advantage of trading using opposite Baron International and Barings Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron International position performs unexpectedly, Barings 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 Barings Emerging will offset losses from the drop in Barings Emerging's long position.Baron International vs. Baron Emerging Markets | Baron International vs. Baron Fifth Avenue | Baron International vs. Baron Discovery Fund | Baron International vs. Baron Real Estate |
Barings Emerging vs. Barings Active Short | Barings Emerging vs. Barings Emerging Markets | Barings Emerging vs. Barings Emerging Markets | Barings Emerging vs. Barings Global Floating |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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