Correlation Between Us Equity and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Us Equity and Baillie Gifford 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 Us Equity and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Equity Growth and Baillie Gifford International, you can compare the effects of market volatilities on Us Equity and Baillie Gifford 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 Us Equity with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Equity and Baillie Gifford.
Diversification Opportunities for Us Equity and Baillie Gifford
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between BGGSX and Baillie is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding The Equity Growth and Baillie Gifford International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford Inte and Us Equity 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 The Equity Growth are associated (or correlated) with Baillie Gifford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baillie Gifford Inte has no effect on the direction of Us Equity i.e., Us Equity and Baillie Gifford go up and down completely randomly.
Pair Corralation between Us Equity and Baillie Gifford
Assuming the 90 days horizon The Equity Growth is expected to generate 2.07 times more return on investment than Baillie Gifford. However, Us Equity is 2.07 times more volatile than Baillie Gifford International. It trades about 0.14 of its potential returns per unit of risk. Baillie Gifford International is currently generating about -0.07 per unit of risk. If you would invest 2,353 in The Equity Growth on October 31, 2024 and sell it today you would earn a total of 540.00 from holding The Equity Growth or generate 22.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Equity Growth vs. Baillie Gifford International
Performance |
| Timeline |
| Equity Growth |
| Baillie Gifford Inte |
Us Equity and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Equity and Baillie Gifford
The main advantage of trading using opposite Us Equity and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Equity position performs unexpectedly, Baillie Gifford 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 Baillie Gifford will offset losses from the drop in Baillie Gifford's long position.| Us Equity vs. Allianzgi Convertible Income | Us Equity vs. Virtus Convertible | Us Equity vs. Advent Claymore Convertible | Us Equity vs. Putnam Convertible Securities |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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