Correlation Between Baillie Gifford and Domini International
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Domini International 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 Domini International 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 Domini International Opportunities, you can compare the effects of market volatilities on Baillie Gifford and Domini International 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 Domini International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Domini International.
Diversification Opportunities for Baillie Gifford and Domini International
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baillie and Domini is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Domini International Opportuni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Domini International 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 Domini International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Domini International has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Domini International go up and down completely randomly.
Pair Corralation between Baillie Gifford and Domini International
Assuming the 90 days horizon Baillie Gifford Health is expected to generate 1.35 times more return on investment than Domini International. However, Baillie Gifford is 1.35 times more volatile than Domini International Opportunities. It trades about 0.0 of its potential returns per unit of risk. Domini International Opportunities is currently generating about 0.0 per unit of risk. If you would invest 585.00 in Baillie Gifford Health on September 3, 2024 and sell it today you would lose (2.00) from holding Baillie Gifford Health or give up 0.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Health vs. Domini International Opportuni
Performance |
| Timeline |
| Baillie Gifford Health |
| Domini International |
Baillie Gifford and Domini International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Domini International
The main advantage of trading using opposite Baillie Gifford and Domini International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Domini International 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 Domini International will offset losses from the drop in Domini International's long position.| Baillie Gifford vs. Legg Mason Partners | Baillie Gifford vs. T Rowe Price | Baillie Gifford vs. Black Oak Emerging | Baillie Gifford vs. Templeton Emerging Markets |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |