Correlation Between Aqr Large and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Aqr Large 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 Aqr Large and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Large Cap and Baillie Gifford Health, you can compare the effects of market volatilities on Aqr Large 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 Aqr Large with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Baillie Gifford.
Diversification Opportunities for Aqr Large and Baillie Gifford
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aqr and Baillie is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and Baillie Gifford Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford Health and Aqr Large 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 Aqr Large Cap 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 Health has no effect on the direction of Aqr Large i.e., Aqr Large and Baillie Gifford go up and down completely randomly.
Pair Corralation between Aqr Large and Baillie Gifford
Assuming the 90 days horizon Aqr Large Cap is expected to under-perform the Baillie Gifford. But the mutual fund apears to be less risky and, when comparing its historical volatility, Aqr Large Cap is 3.14 times less risky than Baillie Gifford. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Baillie Gifford Health is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 580.00 in Baillie Gifford Health on September 14, 2024 and sell it today you would earn a total of 4.00 from holding Baillie Gifford Health or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Large Cap vs. Baillie Gifford Health
Performance |
| Timeline |
| Aqr Large Cap |
| Baillie Gifford Health |
Aqr Large and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Large and Baillie Gifford
The main advantage of trading using opposite Aqr Large and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Large 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.| Aqr Large vs. Aqr Large Cap | Aqr Large vs. Aqr International Defensive | Aqr Large vs. Aqr International Defensive | Aqr Large vs. Aqr International Defensive |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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