Correlation Between Baron Emerging and Hartford Midcap
Can any of the company-specific risk be diversified away by investing in both Baron Emerging and Hartford Midcap 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 Emerging and Hartford Midcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Emerging Markets and The Hartford Midcap, you can compare the effects of market volatilities on Baron Emerging and Hartford Midcap 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 Emerging with a short position of Hartford Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Emerging and Hartford Midcap.
Diversification Opportunities for Baron Emerging and Hartford Midcap
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baron and Hartford is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Baron Emerging Markets and The Hartford Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Midcap and Baron Emerging 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 Emerging Markets are associated (or correlated) with Hartford Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Midcap has no effect on the direction of Baron Emerging i.e., Baron Emerging and Hartford Midcap go up and down completely randomly.
Pair Corralation between Baron Emerging and Hartford Midcap
Assuming the 90 days horizon Baron Emerging Markets is expected to generate 0.79 times more return on investment than Hartford Midcap. However, Baron Emerging Markets is 1.27 times less risky than Hartford Midcap. It trades about 0.08 of its potential returns per unit of risk. The Hartford Midcap is currently generating about 0.05 per unit of risk. If you would invest 1,181 in Baron Emerging Markets on July 6, 2024 and sell it today you would earn a total of 486.00 from holding Baron Emerging Markets or generate 41.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Baron Emerging Markets vs. The Hartford Midcap
Performance |
Timeline |
Baron Emerging Markets |
Hartford Midcap |
Baron Emerging and Hartford Midcap Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Baron Emerging and Hartford Midcap
The main advantage of trading using opposite Baron Emerging and Hartford Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Emerging position performs unexpectedly, Hartford Midcap 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 Hartford Midcap will offset losses from the drop in Hartford Midcap's long position.Baron Emerging vs. Eaton Vance Income | Baron Emerging vs. Baird Aggregate Bond | Baron Emerging vs. Champlain Small | Baron Emerging vs. Mfs Emerging Markets |
Hartford Midcap vs. The Hartford Growth | Hartford Midcap vs. The Hartford Growth | Hartford Midcap vs. The Hartford Growth | Hartford Midcap vs. The Hartford Growth |
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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