Correlation Between Baillie Gifford and Dreyfus Active
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Dreyfus Active 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 Dreyfus Active 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 Dreyfus Active Midcap, you can compare the effects of market volatilities on Baillie Gifford and Dreyfus Active 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 Dreyfus Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Dreyfus Active.
Diversification Opportunities for Baillie Gifford and Dreyfus Active
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Baillie and Dreyfus is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Dreyfus Active Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Active Midcap 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 Dreyfus Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Active Midcap has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Dreyfus Active go up and down completely randomly.
Pair Corralation between Baillie Gifford and Dreyfus Active
Assuming the 90 days horizon Baillie Gifford is expected to generate 3.03 times less return on investment than Dreyfus Active. In addition to that, Baillie Gifford is 1.45 times more volatile than Dreyfus Active Midcap. It trades about 0.03 of its total potential returns per unit of risk. Dreyfus Active Midcap is currently generating about 0.12 per unit of volatility. If you would invest 5,369 in Dreyfus Active Midcap on September 2, 2024 and sell it today you would earn a total of 1,474 from holding Dreyfus Active Midcap or generate 27.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Health vs. Dreyfus Active Midcap
Performance |
| Timeline |
| Baillie Gifford Health |
| Dreyfus Active Midcap |
Baillie Gifford and Dreyfus Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Dreyfus Active
The main advantage of trading using opposite Baillie Gifford and Dreyfus Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Dreyfus Active 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 Dreyfus Active will offset losses from the drop in Dreyfus Active's long position.| Baillie Gifford vs. The Eafe Pure | Baillie Gifford vs. The Long Term | Baillie Gifford vs. Baillie Gifford International | Baillie Gifford vs. Baillie Gifford International |
| Dreyfus Active vs. Fidelity Advisor Health | Dreyfus Active vs. Eventide Healthcare Life | Dreyfus Active vs. Baillie Gifford Health | Dreyfus Active vs. Lord Abbett Health |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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