Correlation Between Baillie Gifford and Oil Gas
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Oil Gas 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 Oil Gas 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 Oil Gas Ultrasector, you can compare the effects of market volatilities on Baillie Gifford and Oil Gas 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 Oil Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Oil Gas.
Diversification Opportunities for Baillie Gifford and Oil Gas
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Baillie and Oil is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Emerging and Oil Gas Ultrasector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oil Gas Ultrasector 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 Oil Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oil Gas Ultrasector has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Oil Gas go up and down completely randomly.
Pair Corralation between Baillie Gifford and Oil Gas
Assuming the 90 days horizon Baillie Gifford Emerging is expected to under-perform the Oil Gas. But the mutual fund apears to be less risky and, when comparing its historical volatility, Baillie Gifford Emerging is 1.91 times less risky than Oil Gas. The mutual fund trades about -0.17 of its potential returns per unit of risk. The Oil Gas Ultrasector is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 3,660 in Oil Gas Ultrasector on September 4, 2024 and sell it today you would earn a total of 328.00 from holding Oil Gas Ultrasector or generate 8.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Baillie Gifford Emerging vs. Oil Gas Ultrasector
Performance |
| Timeline |
| Baillie Gifford Emerging |
| Oil Gas Ultrasector |
Baillie Gifford and Oil Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Oil Gas
The main advantage of trading using opposite Baillie Gifford and Oil Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Oil Gas 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 Oil Gas will offset losses from the drop in Oil Gas' long position.| Baillie Gifford vs. Oil Gas Ultrasector | Baillie Gifford vs. World Energy Fund | Baillie Gifford vs. Dreyfus Natural Resources | Baillie Gifford vs. Gmo Resources |
| Oil Gas vs. Oil Gas Ultrasector | Oil Gas vs. Ultramid Cap Profund Ultramid Cap | Oil Gas vs. Precious Metals Ultrasector | Oil Gas vs. Real Estate Ultrasector |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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