Correlation Between Growth Fund and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Growth Fund and Baillie Gifford 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 Growth Fund and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and Baillie Gifford China, you can compare the effects of market volatilities on Growth Fund and Baillie Gifford 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 Growth Fund with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Baillie Gifford.
Diversification Opportunities for Growth Fund and Baillie Gifford
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Growth and Baillie is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Baillie Gifford China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford China and Growth Fund 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 Growth Fund Of are associated (or correlated) with Baillie Gifford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baillie Gifford China has no effect on the direction of Growth Fund i.e., Growth Fund and Baillie Gifford go up and down completely randomly.
Pair Corralation between Growth Fund and Baillie Gifford
Assuming the 90 days horizon Growth Fund Of is expected to generate 0.58 times more return on investment than Baillie Gifford. However, Growth Fund Of is 1.71 times less risky than Baillie Gifford. It trades about 0.1 of its potential returns per unit of risk. Baillie Gifford China is currently generating about 0.05 per unit of risk. If you would invest 6,152 in Growth Fund Of on November 3, 2024 and sell it today you would earn a total of 1,679 from holding Growth Fund Of or generate 27.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 85.02% |
| Values | Daily Returns |
Growth Fund Of vs. Baillie Gifford China
Performance |
| Timeline |
| Growth Fund |
| Baillie Gifford China |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Growth Fund and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Baillie Gifford
The main advantage of trading using opposite Growth Fund and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Baillie Gifford 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 Baillie Gifford will offset losses from the drop in Baillie Gifford's long position.| Growth Fund vs. Capital World Growth | Growth Fund vs. Europacific Growth Fund | Growth Fund vs. New Perspective Fund | Growth Fund vs. Investment Of America |
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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 Stocks Directory module to find actively traded stocks across global markets.
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