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 Inflation, 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
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Baillie and Lord is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Lord Abbett Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Inflation 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 Inflation 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 under-perform the Lord Abbett. In addition to that, Baillie Gifford is 10.58 times more volatile than Lord Abbett Inflation. It trades about -0.04 of its total potential returns per unit of risk. Lord Abbett Inflation is currently generating about 0.03 per unit of volatility. If you would invest 1,161 in Lord Abbett Inflation on September 4, 2024 and sell it today you would earn a total of 1.00 from holding Lord Abbett Inflation or generate 0.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Baillie Gifford Health vs. Lord Abbett Inflation
Performance |
| Timeline |
| Baillie Gifford Health |
| Lord Abbett Inflation |
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. T Rowe Price | Baillie Gifford vs. T Rowe Price | Baillie Gifford vs. Cs 607 Tax | Baillie Gifford vs. Franklin High Yield |
| Lord Abbett vs. Balanced Fund Retail | Lord Abbett vs. Us Vector Equity | Lord Abbett vs. Gmo Global Equity | Lord Abbett vs. Nationwide Global Equity |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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