Correlation Between Baillie Gifford and Us Equity
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Us Equity 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 Us Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baillie Gifford Global and The Equity Growth, you can compare the effects of market volatilities on Baillie Gifford and Us Equity 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 Us Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Us Equity.
Diversification Opportunities for Baillie Gifford and Us Equity
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baillie and BGGSX is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Global and The Equity Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Growth 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 Global are associated (or correlated) with Us Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Growth has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Us Equity go up and down completely randomly.
Pair Corralation between Baillie Gifford and Us Equity
Assuming the 90 days horizon Baillie Gifford is expected to generate 1.87 times less return on investment than Us Equity. But when comparing it to its historical volatility, Baillie Gifford Global is 1.64 times less risky than Us Equity. It trades about 0.1 of its potential returns per unit of risk. The Equity Growth is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,912 in The Equity Growth on September 3, 2024 and sell it today you would earn a total of 850.00 from holding The Equity Growth or generate 44.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Global vs. The Equity Growth
Performance |
| Timeline |
| Baillie Gifford Global |
| Equity Growth |
Baillie Gifford and Us Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Us Equity
The main advantage of trading using opposite Baillie Gifford and Us Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Us Equity 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 Us Equity will offset losses from the drop in Us Equity's long position.| Baillie Gifford vs. Columbia Real Estate | Baillie Gifford vs. Vanguard Reit Index | Baillie Gifford vs. Tiaa Cref Real Estate | Baillie Gifford vs. Pender Real Estate |
| Us Equity vs. Qs Global Equity | Us Equity vs. Ab Global Bond | Us Equity vs. Ab Global Risk | Us Equity vs. Morningstar Global Income |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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