Correlation Between Baillie Gifford and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Lord Abbett 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 Lord Abbett 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 Lord Abbett Vertible, you can compare the effects of market volatilities on Baillie Gifford and Lord Abbett 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 Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Lord Abbett.
Diversification Opportunities for Baillie Gifford and Lord Abbett
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Baillie and Lord is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Lord Abbett Vertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Vertible 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 Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Vertible has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Lord Abbett go up and down completely randomly.
Pair Corralation between Baillie Gifford and Lord Abbett
Assuming the 90 days horizon Baillie Gifford Health is expected to generate 0.37 times more return on investment than Lord Abbett. However, Baillie Gifford Health is 2.72 times less risky than Lord Abbett. It trades about -0.32 of its potential returns per unit of risk. Lord Abbett Vertible is currently generating about -0.13 per unit of risk. If you would invest 585.00 in Baillie Gifford Health on October 11, 2024 and sell it today you would lose (12.00) from holding Baillie Gifford Health or give up 2.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Health vs. Lord Abbett Vertible
Performance |
| Timeline |
| Baillie Gifford Health |
| Lord Abbett Vertible |
Baillie Gifford and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Lord Abbett
The main advantage of trading using opposite Baillie Gifford and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Lord Abbett 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 Lord Abbett will offset losses from the drop in Lord Abbett's long position.| Baillie Gifford vs. Highland Longshort Healthcare | Baillie Gifford vs. The Hartford Healthcare | Baillie Gifford vs. The Gabelli Healthcare | Baillie Gifford vs. Blackrock Health Sciences |
| Lord Abbett vs. Lord Abbett Health | Lord Abbett vs. Alger Health Sciences | Lord Abbett vs. Baillie Gifford Health | Lord Abbett vs. Baron Health Care |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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