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
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Absolute and Baillie is 0.04. 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 Arbitrage is expected to under-perform the Baillie Gifford. In addition to that, Absolute Convertible is 1.35 times more volatile than Baillie Gifford Health. It trades about -0.31 of its total potential returns per unit of risk. Baillie Gifford Health is currently generating about -0.4 per unit of volatility. If you would invest 590.00 in Baillie Gifford Health on October 10, 2024 and sell it today you would lose (17.00) from holding Baillie Gifford Health or give up 2.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| 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. Harding Loevner Global | Absolute Convertible vs. Us Global Investors | Absolute Convertible vs. Morgan Stanley Global | Absolute Convertible vs. Federated Global Allocation |
| Baillie Gifford vs. Ab Small Cap | Baillie Gifford vs. Ab Small Cap | Baillie Gifford vs. Tax Managed Mid Small | Baillie Gifford vs. Sp Smallcap 600 |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |