Correlation Between Baillie Gifford and Cref Money
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Cref 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 Cref Money 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 Cref Money Market, you can compare the effects of market volatilities on Baillie Gifford and Cref 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 Cref Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Cref Money.
Diversification Opportunities for Baillie Gifford and Cref Money
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Baillie and Cref is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Global and Cref Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cref 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 Global are associated (or correlated) with Cref Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cref Money Market has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Cref Money go up and down completely randomly.
Pair Corralation between Baillie Gifford and Cref Money
Assuming the 90 days horizon Baillie Gifford Global is expected to under-perform the Cref Money. In addition to that, Baillie Gifford is 122.58 times more volatile than Cref Money Market. It trades about -0.15 of its total potential returns per unit of risk. Cref Money Market is currently generating about 1.02 per unit of volatility. If you would invest 2,979 in Cref Money Market on October 21, 2024 and sell it today you would earn a total of 10.00 from holding Cref Money Market or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Global vs. Cref Money Market
Performance |
| Timeline |
| Baillie Gifford Global |
| Cref Money Market |
Baillie Gifford and Cref Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Cref Money
The main advantage of trading using opposite Baillie Gifford and Cref Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Cref 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 Cref Money will offset losses from the drop in Cref Money's long position.| Baillie Gifford vs. Cref Money Market | Baillie Gifford vs. Putnam Money Market | Baillie Gifford vs. Pioneer Money Market | Baillie Gifford vs. Franklin Government Money |
| Cref Money vs. Global Diversified Income | Cref Money vs. Guidepath Conservative Income | Cref Money vs. Tax Free Conservative Income | Cref Money vs. Putnam Diversified 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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