Correlation Between Baillie Gifford and Columbia
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Columbia 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 Columbia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baillie Gifford Health and Columbia Government Mortgage, you can compare the effects of market volatilities on Baillie Gifford and Columbia 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 Columbia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Columbia.
Diversification Opportunities for Baillie Gifford and Columbia
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baillie and Columbia is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Columbia Government Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Government 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 Health are associated (or correlated) with Columbia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Government has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Columbia go up and down completely randomly.
Pair Corralation between Baillie Gifford and Columbia
Assuming the 90 days horizon Baillie Gifford Health is expected to under-perform the Columbia. In addition to that, Baillie Gifford is 3.82 times more volatile than Columbia Government Mortgage. It trades about -0.04 of its total potential returns per unit of risk. Columbia Government Mortgage is currently generating about -0.09 per unit of volatility. If you would invest 1,772 in Columbia Government Mortgage on September 4, 2024 and sell it today you would lose (11.00) from holding Columbia Government Mortgage or give up 0.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.0% |
| Values | Daily Returns |
Baillie Gifford Health vs. Columbia Government Mortgage
Performance |
| Timeline |
| Baillie Gifford Health |
| Columbia Government |
Baillie Gifford and Columbia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Columbia
The main advantage of trading using opposite Baillie Gifford and Columbia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Columbia 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 Columbia will offset losses from the drop in Columbia's long position.| Baillie Gifford vs. T Rowe Price | Baillie Gifford vs. T Rowe Price | Baillie Gifford vs. Cs 607 Tax | Baillie Gifford vs. Franklin High Yield |
| Columbia vs. Rbc Microcap Value | Columbia vs. Qs Large Cap | Columbia vs. T Rowe Price | Columbia vs. Balanced Fund Investor |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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