Correlation Between Baillie Gifford and The Hartford
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and The Hartford 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 The Hartford 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 The Hartford Healthcare, you can compare the effects of market volatilities on Baillie Gifford and The Hartford 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 The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and The Hartford.
Diversification Opportunities for Baillie Gifford and The Hartford
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baillie and THE is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and The Hartford Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford Healthcare 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 The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hartford Healthcare has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and The Hartford go up and down completely randomly.
Pair Corralation between Baillie Gifford and The Hartford
Assuming the 90 days horizon Baillie Gifford Health is expected to generate 1.45 times more return on investment than The Hartford. However, Baillie Gifford is 1.45 times more volatile than The Hartford Healthcare. It trades about 0.02 of its potential returns per unit of risk. The Hartford Healthcare is currently generating about 0.02 per unit of risk. If you would invest 571.00 in Baillie Gifford Health on September 1, 2024 and sell it today you would earn a total of 12.00 from holding Baillie Gifford Health or generate 2.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Health vs. The Hartford Healthcare
Performance |
| Timeline |
| Baillie Gifford Health |
| The Hartford Healthcare |
Baillie Gifford and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and The Hartford
The main advantage of trading using opposite Baillie Gifford and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford'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 |
| The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth | The Hartford vs. The Hartford Growth |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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