Correlation Between Baillie Gifford and Eco Animal
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Eco Animal 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 Eco Animal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baillie Gifford European and Eco Animal Health, you can compare the effects of market volatilities on Baillie Gifford and Eco Animal 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 Eco Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Eco Animal.
Diversification Opportunities for Baillie Gifford and Eco Animal
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baillie and Eco is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford European and Eco Animal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eco Animal Health 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 European are associated (or correlated) with Eco Animal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eco Animal Health has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Eco Animal go up and down completely randomly.
Pair Corralation between Baillie Gifford and Eco Animal
Assuming the 90 days trading horizon Baillie Gifford is expected to generate 5.72 times less return on investment than Eco Animal. But when comparing it to its historical volatility, Baillie Gifford European is 3.01 times less risky than Eco Animal. It trades about 0.08 of its potential returns per unit of risk. Eco Animal Health is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 6,600 in Eco Animal Health on September 21, 2024 and sell it today you would earn a total of 500.00 from holding Eco Animal Health or generate 7.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford European vs. Eco Animal Health
Performance |
| Timeline |
| Baillie Gifford European |
| Eco Animal Health |
Baillie Gifford and Eco Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Eco Animal
The main advantage of trading using opposite Baillie Gifford and Eco Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Eco Animal 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 Eco Animal will offset losses from the drop in Eco Animal's long position.| Baillie Gifford vs. Eco Animal Health | Baillie Gifford vs. Samsung Electronics Co | Baillie Gifford vs. Target Healthcare REIT | Baillie Gifford vs. Global Net Lease |
| Eco Animal vs. Home Depot | Eco Animal vs. River and Mercantile | Eco Animal vs. Chrysalis Investments | Eco Animal vs. NVIDIA Corp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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