Correlation Between Baillie Gifford and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Goldman Sachs 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 Goldman Sachs 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 Goldman Sachs Clean, you can compare the effects of market volatilities on Baillie Gifford and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Goldman Sachs.
Diversification Opportunities for Baillie Gifford and Goldman Sachs
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baillie and Goldman is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Goldman Sachs Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Clean 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Clean has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Goldman Sachs go up and down completely randomly.
Pair Corralation between Baillie Gifford and Goldman Sachs
Assuming the 90 days horizon Baillie Gifford Health is expected to generate 1.03 times more return on investment than Goldman Sachs. However, Baillie Gifford is 1.03 times more volatile than Goldman Sachs Clean. It trades about 0.02 of its potential returns per unit of risk. Goldman Sachs Clean is currently generating about -0.04 per unit of risk. If you would invest 570.00 in Baillie Gifford Health on September 2, 2024 and sell it today you would earn a total of 13.00 from holding Baillie Gifford Health or generate 2.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Health vs. Goldman Sachs Clean
Performance |
| Timeline |
| Baillie Gifford Health |
| Goldman Sachs Clean |
Baillie Gifford and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Goldman Sachs
The main advantage of trading using opposite Baillie Gifford and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' 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 |
| Goldman Sachs vs. Pace High Yield | Goldman Sachs vs. Dunham High Yield | Goldman Sachs vs. Valic Company I | Goldman Sachs vs. American Century High |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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