Correlation Between Baillie Gifford and Longleaf Partners
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Longleaf Partners 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 Longleaf Partners 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 Longleaf Partners Small Cap, you can compare the effects of market volatilities on Baillie Gifford and Longleaf Partners 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 Longleaf Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Longleaf Partners.
Diversification Opportunities for Baillie Gifford and Longleaf Partners
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Baillie and Longleaf is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Longleaf Partners Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longleaf Partners Small 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 Longleaf Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longleaf Partners Small has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Longleaf Partners go up and down completely randomly.
Pair Corralation between Baillie Gifford and Longleaf Partners
If you would invest 2,737 in Longleaf Partners Small Cap on November 3, 2024 and sell it today you would earn a total of 54.00 from holding Longleaf Partners Small Cap or generate 1.97% 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. Longleaf Partners Small Cap
Performance |
| Timeline |
| Baillie Gifford Health |
| Longleaf Partners Small |
Baillie Gifford and Longleaf Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Longleaf Partners
The main advantage of trading using opposite Baillie Gifford and Longleaf Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Longleaf Partners 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 Longleaf Partners will offset losses from the drop in Longleaf Partners' long position.| Baillie Gifford vs. Rbc Bluebay Global | Baillie Gifford vs. Aqr Risk Parity | Baillie Gifford vs. Needham Aggressive Growth | Baillie Gifford vs. Calamos High Income |
| Longleaf Partners vs. Payden High Income | Longleaf Partners vs. Msift High Yield | Longleaf Partners vs. Guggenheim High Yield | Longleaf Partners vs. Six Circles Credit |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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