Correlation Between Baillie Gifford and General Money
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and General Money 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 General Money 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 General Money Market, you can compare the effects of market volatilities on Baillie Gifford and General Money 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 General Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and General Money.
Diversification Opportunities for Baillie Gifford and General Money
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Baillie and General is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford China and General Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Money Market 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 General Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Money Market has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and General Money go up and down completely randomly.
Pair Corralation between Baillie Gifford and General Money
Assuming the 90 days horizon Baillie Gifford China is expected to under-perform the General Money. In addition to that, Baillie Gifford is 1.76 times more volatile than General Money Market. It trades about -0.03 of its total potential returns per unit of risk. General Money Market is currently generating about 0.02 per unit of volatility. If you would invest 92.00 in General Money Market on September 4, 2024 and sell it today you would earn a total of 8.00 from holding General Money Market or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.21% |
| Values | Daily Returns |
Baillie Gifford China vs. General Money Market
Performance |
| Timeline |
| Baillie Gifford China |
| General Money Market |
Baillie Gifford and General Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and General Money
The main advantage of trading using opposite Baillie Gifford and General Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, General Money 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 General Money will offset losses from the drop in General Money's long position.| Baillie Gifford vs. Lord Abbett Diversified | Baillie Gifford vs. Wasatch Small Cap | Baillie Gifford vs. T Rowe Price | Baillie Gifford vs. Harbor Diversified International |
| General Money vs. Vanguard Total Stock | General Money vs. Vanguard 500 Index | General Money vs. Vanguard Total Stock | General Money vs. Vanguard Total Stock |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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