Correlation Between Baillie Gifford and Ab Impact
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Ab Impact 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 Ab Impact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baillie Gifford Emerging and Ab Impact Municipal, you can compare the effects of market volatilities on Baillie Gifford and Ab Impact 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 Ab Impact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Ab Impact.
Diversification Opportunities for Baillie Gifford and Ab Impact
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Baillie and ABIMX is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Emerging and Ab Impact Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Impact Municipal 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 Emerging are associated (or correlated) with Ab Impact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Impact Municipal has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Ab Impact go up and down completely randomly.
Pair Corralation between Baillie Gifford and Ab Impact
Assuming the 90 days horizon Baillie Gifford is expected to generate 2.03 times less return on investment than Ab Impact. In addition to that, Baillie Gifford is 3.59 times more volatile than Ab Impact Municipal. It trades about 0.01 of its total potential returns per unit of risk. Ab Impact Municipal is currently generating about 0.07 per unit of volatility. If you would invest 986.00 in Ab Impact Municipal on September 3, 2024 and sell it today you would earn a total of 13.00 from holding Ab Impact Municipal or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Emerging vs. Ab Impact Municipal
Performance |
| Timeline |
| Baillie Gifford Emerging |
| Ab Impact Municipal |
Baillie Gifford and Ab Impact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Ab Impact
The main advantage of trading using opposite Baillie Gifford and Ab Impact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Ab Impact 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 Ab Impact will offset losses from the drop in Ab Impact's long position.| Baillie Gifford vs. Ab Impact Municipal | Baillie Gifford vs. Morningstar Municipal Bond | Baillie Gifford vs. Transamerica Funds | Baillie Gifford vs. Gamco Global Telecommunications |
| Ab Impact vs. HUMANA INC | Ab Impact vs. Aquagold International | Ab Impact vs. Barloworld Ltd ADR | Ab Impact vs. Morningstar Unconstrained Allocation |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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