Correlation Between Baillie Gifford and Johcm Global
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Johcm Global 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 Johcm Global 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 Johcm Global Equity, you can compare the effects of market volatilities on Baillie Gifford and Johcm Global 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 Johcm Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Johcm Global.
Diversification Opportunities for Baillie Gifford and Johcm Global
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baillie and Johcm is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Johcm Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johcm Global Equity 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 Johcm Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johcm Global Equity has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Johcm Global go up and down completely randomly.
Pair Corralation between Baillie Gifford and Johcm Global
Assuming the 90 days horizon Baillie Gifford is expected to generate 3.26 times less return on investment than Johcm Global. In addition to that, Baillie Gifford is 1.21 times more volatile than Johcm Global Equity. It trades about 0.02 of its total potential returns per unit of risk. Johcm Global Equity is currently generating about 0.06 per unit of volatility. If you would invest 1,288 in Johcm Global Equity on August 26, 2024 and sell it today you would earn a total of 210.00 from holding Johcm Global Equity or generate 16.3% 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. Johcm Global Equity
Performance |
| Timeline |
| Baillie Gifford Health |
| Johcm Global Equity |
Baillie Gifford and Johcm Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Johcm Global
The main advantage of trading using opposite Baillie Gifford and Johcm Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Johcm Global 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 Johcm Global will offset losses from the drop in Johcm Global's long position.| Baillie Gifford vs. Jennison Natural Resources | Baillie Gifford vs. Oil Gas Ultrasector | Baillie Gifford vs. Icon Natural Resources | Baillie Gifford vs. Energy Basic Materials |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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