Correlation Between Baillie Gifford and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Harding Loevner 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 Harding Loevner 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 Harding Loevner International, you can compare the effects of market volatilities on Baillie Gifford and Harding Loevner 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 Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Harding Loevner.
Diversification Opportunities for Baillie Gifford and Harding Loevner
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Baillie and Harding is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Harding Loevner International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harding Loevner Inte 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 Harding Loevner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harding Loevner Inte has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Harding Loevner go up and down completely randomly.
Pair Corralation between Baillie Gifford and Harding Loevner
Assuming the 90 days horizon Baillie Gifford Health is expected to under-perform the Harding Loevner. In addition to that, Baillie Gifford is 1.72 times more volatile than Harding Loevner International. It trades about -0.03 of its total potential returns per unit of risk. Harding Loevner International is currently generating about 0.01 per unit of volatility. If you would invest 1,697 in Harding Loevner International on November 2, 2024 and sell it today you would earn a total of 53.00 from holding Harding Loevner International or generate 3.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Baillie Gifford Health vs. Harding Loevner International
Performance |
| Timeline |
| Baillie Gifford Health |
| Harding Loevner Inte |
Baillie Gifford and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Harding Loevner
The main advantage of trading using opposite Baillie Gifford and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Harding Loevner 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 Harding Loevner will offset losses from the drop in Harding Loevner's long position.| Baillie Gifford vs. Ab Bond Inflation | Baillie Gifford vs. Touchstone Ultra Short | Baillie Gifford vs. Goldman Sachs Short | Baillie Gifford vs. Ab Bond Inflation |
| Harding Loevner vs. Allianzgi Convertible Income | Harding Loevner vs. Columbia Convertible Securities | Harding Loevner vs. Putnam Convertible Securities | Harding Loevner vs. Calamos Dynamic Convertible |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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