Correlation Between Baron Health and Multimanager Lifestyle
Can any of the company-specific risk be diversified away by investing in both Baron Health and Multimanager Lifestyle 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 Health and Multimanager Lifestyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baron Health Care and Multimanager Lifestyle Aggressive, you can compare the effects of market volatilities on Baron Health and Multimanager Lifestyle 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 Health with a short position of Multimanager Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Health and Multimanager Lifestyle.
Diversification Opportunities for Baron Health and Multimanager Lifestyle
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Baron and Multimanager is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Baron Health Care and Multimanager Lifestyle Aggress in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multimanager Lifestyle and Baron Health 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 Health Care are associated (or correlated) with Multimanager Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multimanager Lifestyle has no effect on the direction of Baron Health i.e., Baron Health and Multimanager Lifestyle go up and down completely randomly.
Pair Corralation between Baron Health and Multimanager Lifestyle
Assuming the 90 days horizon Baron Health is expected to generate 1.64 times less return on investment than Multimanager Lifestyle. In addition to that, Baron Health is 1.38 times more volatile than Multimanager Lifestyle Aggressive. It trades about 0.09 of its total potential returns per unit of risk. Multimanager Lifestyle Aggressive is currently generating about 0.2 per unit of volatility. If you would invest 1,492 in Multimanager Lifestyle Aggressive on May 27, 2025 and sell it today you would earn a total of 112.00 from holding Multimanager Lifestyle Aggressive or generate 7.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baron Health Care vs. Multimanager Lifestyle Aggress
Performance |
| Timeline |
| Baron Health Care |
| Multimanager Lifestyle |
Baron Health and Multimanager Lifestyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baron Health and Multimanager Lifestyle
The main advantage of trading using opposite Baron Health and Multimanager Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Health position performs unexpectedly, Multimanager Lifestyle 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 Multimanager Lifestyle will offset losses from the drop in Multimanager Lifestyle's long position.| Baron Health vs. Vanguard Financials Index | Baron Health vs. Gabelli Global Financial | Baron Health vs. Transamerica Financial Life | Baron Health vs. Davis Financial Fund |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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