Correlation Between Absolute Convertible and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Absolute Convertible 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 Absolute Convertible and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolute Convertible Arbitrage and Baillie Gifford Health, you can compare the effects of market volatilities on Absolute Convertible 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 Absolute Convertible with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Convertible and Baillie Gifford.
Diversification Opportunities for Absolute Convertible and Baillie Gifford
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Absolute and Baillie is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Convertible Arbitrage 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 Absolute Convertible 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 Absolute Convertible Arbitrage 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 Absolute Convertible i.e., Absolute Convertible and Baillie Gifford go up and down completely randomly.
Pair Corralation between Absolute Convertible and Baillie Gifford
Assuming the 90 days horizon Absolute Convertible is expected to generate 1.04 times less return on investment than Baillie Gifford. But when comparing it to its historical volatility, Absolute Convertible Arbitrage is 22.18 times less risky than Baillie Gifford. It trades about 0.56 of its potential returns per unit of risk. Baillie Gifford Health is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 547.00 in Baillie Gifford Health on September 2, 2024 and sell it today you would earn a total of 35.00 from holding Baillie Gifford Health or generate 6.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absolute Convertible Arbitrage vs. Baillie Gifford Health
Performance |
| Timeline |
| Absolute Convertible |
| Baillie Gifford Health |
Absolute Convertible and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Convertible and Baillie Gifford
The main advantage of trading using opposite Absolute Convertible and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Convertible 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.| Absolute Convertible vs. Angel Oak Multi Strategy | Absolute Convertible vs. Transamerica Emerging Markets | Absolute Convertible vs. Black Oak Emerging | Absolute Convertible vs. Barings Emerging Markets |
| Baillie Gifford vs. Absolute Convertible Arbitrage | Baillie Gifford vs. Allianzgi Convertible Income | Baillie Gifford vs. Lord Abbett Convertible | Baillie Gifford vs. The Gamco Global |
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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