Correlation Between Baillie Gifford and Western Asset
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Western Asset 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 Western Asset 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 Western Asset High, you can compare the effects of market volatilities on Baillie Gifford and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Western Asset.
Diversification Opportunities for Baillie Gifford and Western Asset
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baillie and Western is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Eafe and Western Asset High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset High 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset High has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Western Asset go up and down completely randomly.
Pair Corralation between Baillie Gifford and Western Asset
Assuming the 90 days horizon Baillie Gifford is expected to generate 1.06 times less return on investment than Western Asset. In addition to that, Baillie Gifford is 3.08 times more volatile than Western Asset High. It trades about 0.04 of its total potential returns per unit of risk. Western Asset High is currently generating about 0.12 per unit of volatility. If you would invest 583.00 in Western Asset High on September 13, 2024 and sell it today you would earn a total of 125.00 from holding Western Asset High or generate 21.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Eafe vs. Western Asset High
Performance |
| Timeline |
| Baillie Gifford Eafe |
| Western Asset High |
Baillie Gifford and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Western Asset
The main advantage of trading using opposite Baillie Gifford and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Baillie Gifford vs. James Balanced Golden | Baillie Gifford vs. Invesco Gold Special | Baillie Gifford vs. Vy Goldman Sachs | Baillie Gifford vs. Goldman Sachs Clean |
| Western Asset vs. Guggenheim Risk Managed | Western Asset vs. Simt Real Estate | Western Asset vs. Redwood Real Estate | Western Asset vs. Vy Clarion Real |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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