Correlation Between Baillie Gifford and Inflation-protected
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Inflation-protected 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 Inflation-protected 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 Inflation Protected Bond Fund, you can compare the effects of market volatilities on Baillie Gifford and Inflation-protected 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 Inflation-protected. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Inflation-protected.
Diversification Opportunities for Baillie Gifford and Inflation-protected
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baillie and Inflation-protected is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Eafe and Inflation Protected Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflation Protected 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 Inflation-protected. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflation Protected has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Inflation-protected go up and down completely randomly.
Pair Corralation between Baillie Gifford and Inflation-protected
Assuming the 90 days horizon Baillie Gifford is expected to generate 2.42 times less return on investment than Inflation-protected. In addition to that, Baillie Gifford is 2.48 times more volatile than Inflation Protected Bond Fund. It trades about 0.02 of its total potential returns per unit of risk. Inflation Protected Bond Fund is currently generating about 0.14 per unit of volatility. If you would invest 952.00 in Inflation Protected Bond Fund on September 5, 2024 and sell it today you would earn a total of 82.00 from holding Inflation Protected Bond Fund or generate 8.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Baillie Gifford Eafe vs. Inflation Protected Bond Fund
Performance |
| Timeline |
| Baillie Gifford Eafe |
| Inflation Protected |
Baillie Gifford and Inflation-protected Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Inflation-protected
The main advantage of trading using opposite Baillie Gifford and Inflation-protected positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Inflation-protected 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 Inflation-protected will offset losses from the drop in Inflation-protected's long position.| Baillie Gifford vs. Inflation Protected Bond Fund | Baillie Gifford vs. Western Asset Inflation | Baillie Gifford vs. Fidelity Sai Inflationfocused | Baillie Gifford vs. Ab Bond Inflation |
| Inflation-protected vs. Pace High Yield | Inflation-protected vs. Fidelity Capital Income | Inflation-protected vs. Msift High Yield | Inflation-protected vs. Blackrock High Yield |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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