Correlation Between Baillie Gifford and Us Government
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Us Government 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 Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baillie Gifford Eafe and Us Government Securities, you can compare the effects of market volatilities on Baillie Gifford and Us Government 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 Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Us Government.
Diversification Opportunities for Baillie Gifford and Us Government
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Baillie and CGTCX is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Eafe and Us Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Securities 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 Eafe are associated (or correlated) with Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Securities has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Us Government go up and down completely randomly.
Pair Corralation between Baillie Gifford and Us Government
Assuming the 90 days horizon Baillie Gifford Eafe is expected to generate 2.67 times more return on investment than Us Government. However, Baillie Gifford is 2.67 times more volatile than Us Government Securities. It trades about 0.04 of its potential returns per unit of risk. Us Government Securities is currently generating about 0.04 per unit of risk. If you would invest 1,410 in Baillie Gifford Eafe on September 4, 2024 and sell it today you would earn a total of 127.00 from holding Baillie Gifford Eafe or generate 9.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Baillie Gifford Eafe vs. Us Government Securities
Performance |
| Timeline |
| Baillie Gifford Eafe |
| Us Government Securities |
Baillie Gifford and Us Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Us Government
The main advantage of trading using opposite Baillie Gifford and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Us Government 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 Government will offset losses from the drop in Us Government's long position.| Baillie Gifford vs. Dreyfus Natural Resources | Baillie Gifford vs. Gamco Natural Resources | Baillie Gifford vs. Calvert Global Energy | Baillie Gifford vs. Oil Gas Ultrasector |
| Us Government vs. Income Fund Of | Us Government vs. American Mutual Fund | Us Government vs. American Mutual Fund | Us Government vs. American Funds 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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