Correlation Between Baillie Gifford and Highland Long/short
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Highland Long/short 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 Highland Long/short 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 Highland Longshort Healthcare, you can compare the effects of market volatilities on Baillie Gifford and Highland Long/short 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 Highland Long/short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Highland Long/short.
Diversification Opportunities for Baillie Gifford and Highland Long/short
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baillie and Highland is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Highland Longshort Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Long/short 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 Highland Long/short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Long/short has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Highland Long/short go up and down completely randomly.
Pair Corralation between Baillie Gifford and Highland Long/short
Assuming the 90 days horizon Baillie Gifford Health is expected to under-perform the Highland Long/short. In addition to that, Baillie Gifford is 5.68 times more volatile than Highland Longshort Healthcare. It trades about -0.03 of its total potential returns per unit of risk. Highland Longshort Healthcare is currently generating about 0.12 per unit of volatility. If you would invest 1,602 in Highland Longshort Healthcare on August 24, 2024 and sell it today you would earn a total of 50.00 from holding Highland Longshort Healthcare or generate 3.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Health vs. Highland Longshort Healthcare
Performance |
| Timeline |
| Baillie Gifford Health |
| Highland Long/short |
Baillie Gifford and Highland Long/short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Highland Long/short
The main advantage of trading using opposite Baillie Gifford and Highland Long/short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Highland Long/short 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 Highland Long/short will offset losses from the drop in Highland Long/short's long position.| Baillie Gifford vs. Mutual Of America | Baillie Gifford vs. Palm Valley Capital | Baillie Gifford vs. Boston Partners Small | Baillie Gifford vs. Mid Cap Value Profund |
| Highland Long/short vs. Pace High Yield | Highland Long/short vs. Multisector Bond Sma | Highland Long/short vs. Metropolitan West Porate | Highland Long/short vs. Ft 7934 Corporate |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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