Correlation Between Baillie Gifford and Growth Equity
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Growth Equity 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 Growth Equity 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 Growth Equity Investor, you can compare the effects of market volatilities on Baillie Gifford and Growth Equity 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 Growth Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Growth Equity.
Diversification Opportunities for Baillie Gifford and Growth Equity
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Baillie and Growth is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Growth Equity Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Equity Investor 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 Growth Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Equity Investor has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Growth Equity go up and down completely randomly.
Pair Corralation between Baillie Gifford and Growth Equity
Assuming the 90 days horizon Baillie Gifford is expected to generate 2.66 times less return on investment than Growth Equity. In addition to that, Baillie Gifford is 1.19 times more volatile than Growth Equity Investor. It trades about 0.03 of its total potential returns per unit of risk. Growth Equity Investor is currently generating about 0.11 per unit of volatility. If you would invest 2,203 in Growth Equity Investor on September 1, 2024 and sell it today you would earn a total of 780.00 from holding Growth Equity Investor or generate 35.41% 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. Growth Equity Investor
Performance |
| Timeline |
| Baillie Gifford Health |
| Growth Equity Investor |
Baillie Gifford and Growth Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Growth Equity
The main advantage of trading using opposite Baillie Gifford and Growth Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Growth Equity 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 Growth Equity will offset losses from the drop in Growth Equity'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 |
| Growth Equity vs. Huber Capital Equity | Growth Equity vs. Calamos Global Equity | Growth Equity vs. Us Strategic Equity | Growth Equity vs. Balanced Fund Retail |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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