Correlation Between Mfs Government and Baron Health
Can any of the company-specific risk be diversified away by investing in both Mfs Government 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 Mfs Government and Baron Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Government Securities and Baron Health Care, you can compare the effects of market volatilities on Mfs Government 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 Mfs Government with a short position of Baron Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Government and Baron Health.
Diversification Opportunities for Mfs Government and Baron Health
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mfs and Baron is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Government Securities 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 Mfs Government 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 Mfs Government Securities 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 Mfs Government i.e., Mfs Government and Baron Health go up and down completely randomly.
Pair Corralation between Mfs Government and Baron Health
Assuming the 90 days horizon Mfs Government is expected to generate 1.97 times less return on investment than Baron Health. But when comparing it to its historical volatility, Mfs Government Securities is 2.99 times less risky than Baron Health. It trades about 0.15 of its potential returns per unit of risk. Baron Health Care is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,756 in Baron Health Care on June 2, 2025 and sell it today you would earn a total of 88.00 from holding Baron Health Care or generate 5.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Government Securities vs. Baron Health Care
Performance |
| Timeline |
| Mfs Government Securities |
| Baron Health Care |
Mfs Government and Baron Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Government and Baron Health
The main advantage of trading using opposite Mfs Government and Baron Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Government 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.| Mfs Government vs. Mfs Prudent Investor | Mfs Government vs. Mfs Prudent Investor | Mfs Government vs. Mfs Prudent Investor | Mfs Government vs. Mfs Prudent Investor |
| Baron Health vs. Saat Market Growth | Baron Health vs. Doubleline Emerging Markets | Baron Health vs. Franklin Emerging Market | Baron Health vs. Blackrock Emerging Markets |
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 CEOs Directory module to screen CEOs from public companies around the world.
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