Correlation Between Baillie Gifford and Ab Bond
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Ab Bond 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 Baillie Gifford and Ab Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baillie Gifford China and Ab Bond Inflation, you can compare the effects of market volatilities on Baillie Gifford and Ab Bond 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 Baillie Gifford with a short position of Ab Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Ab Bond.
Diversification Opportunities for Baillie Gifford and Ab Bond
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baillie and ABNCX is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford China and Ab Bond Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Bond Inflation and Baillie Gifford 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 Baillie Gifford China are associated (or correlated) with Ab Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Bond Inflation has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Ab Bond go up and down completely randomly.
Pair Corralation between Baillie Gifford and Ab Bond
Assuming the 90 days horizon Baillie Gifford is expected to generate 1.15 times less return on investment than Ab Bond. In addition to that, Baillie Gifford is 7.37 times more volatile than Ab Bond Inflation. It trades about 0.01 of its total potential returns per unit of risk. Ab Bond Inflation is currently generating about 0.09 per unit of volatility. If you would invest 953.00 in Ab Bond Inflation on September 3, 2024 and sell it today you would earn a total of 53.00 from holding Ab Bond Inflation or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford China vs. Ab Bond Inflation
Performance |
| Timeline |
| Baillie Gifford China |
| Ab Bond Inflation |
Baillie Gifford and Ab Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Ab Bond
The main advantage of trading using opposite Baillie Gifford and Ab Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Ab Bond 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 Ab Bond will offset losses from the drop in Ab Bond's long position.| Baillie Gifford vs. General Money Market | Baillie Gifford vs. John Hancock Money | Baillie Gifford vs. Transamerica Funds | Baillie Gifford vs. Blackrock Exchange Portfolio |
| Ab Bond vs. Vanguard Short Term Inflation Protected | Ab Bond vs. T Rowe Price | Ab Bond vs. T Rowe Price | Ab Bond vs. Tiaa Cref Inflation Linked Bond |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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