Correlation Between Baillie Gifford and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Legg Mason 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 Legg Mason 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 Legg Mason Bw, you can compare the effects of market volatilities on Baillie Gifford and Legg Mason 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 Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Legg Mason.
Diversification Opportunities for Baillie Gifford and Legg Mason
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baillie and Legg is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Legg Mason Bw in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Bw 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 Legg Mason. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legg Mason Bw has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Legg Mason go up and down completely randomly.
Pair Corralation between Baillie Gifford and Legg Mason
Assuming the 90 days horizon Baillie Gifford Health is expected to generate 2.26 times more return on investment than Legg Mason. However, Baillie Gifford is 2.26 times more volatile than Legg Mason Bw. It trades about -0.01 of its potential returns per unit of risk. Legg Mason Bw is currently generating about -0.12 per unit of risk. If you would invest 589.00 in Baillie Gifford Health on September 3, 2024 and sell it today you would lose (6.00) from holding Baillie Gifford Health or give up 1.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Health vs. Legg Mason Bw
Performance |
| Timeline |
| Baillie Gifford Health |
| Legg Mason Bw |
Baillie Gifford and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Legg Mason
The main advantage of trading using opposite Baillie Gifford and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Legg Mason 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 Legg Mason will offset losses from the drop in Legg Mason's long position.| Baillie Gifford vs. Legg Mason Partners | Baillie Gifford vs. T Rowe Price | Baillie Gifford vs. Black Oak Emerging | Baillie Gifford vs. Templeton Emerging Markets |
| Legg Mason vs. Baron Health Care | Legg Mason vs. Baillie Gifford Health | Legg Mason vs. Highland Longshort Healthcare | Legg Mason vs. Prudential Health Sciences |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |