Correlation Between Baron Emerging and Delaware Emerging

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Can any of the company-specific risk be diversified away by investing in both Baron Emerging and Delaware 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 Emerging and Delaware Emerging 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 Delaware Emerging Markets, you can compare the effects of market volatilities on Baron Emerging and Delaware 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 Emerging with a short position of Delaware Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baron Emerging and Delaware Emerging.

Diversification Opportunities for Baron Emerging and Delaware Emerging

0.97
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Baron and Delaware is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Baron Emerging Markets and Delaware Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delaware Emerging Markets 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 Delaware Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delaware Emerging Markets has no effect on the direction of Baron Emerging i.e., Baron Emerging and Delaware Emerging go up and down completely randomly.

Pair Corralation between Baron Emerging and Delaware Emerging

Assuming the 90 days horizon Baron Emerging Markets is expected to under-perform the Delaware Emerging. But the mutual fund apears to be less risky and, when comparing its historical volatility, Baron Emerging Markets is 1.64 times less risky than Delaware Emerging. The mutual fund trades about -0.18 of its potential returns per unit of risk. The Delaware Emerging Markets is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,084  in Delaware Emerging Markets on January 20, 2024 and sell it today you would earn a total of  17.00  from holding Delaware Emerging Markets or generate 0.82% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Baron Emerging Markets  vs.  Delaware Emerging Markets

 Performance 
       Timeline  
Baron Emerging Markets 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Baron Emerging Markets are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Baron Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Delaware Emerging Markets 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Delaware Emerging Markets are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Delaware Emerging may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Baron Emerging and Delaware Emerging Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Baron Emerging and Delaware Emerging

The main advantage of trading using opposite Baron Emerging and Delaware Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baron Emerging position performs unexpectedly, Delaware 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 Delaware Emerging will offset losses from the drop in Delaware Emerging's long position.
The idea behind Baron Emerging Markets and Delaware Emerging Markets pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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