Correlation Between Baillie Gifford and Mfs International
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Mfs 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 Mfs 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 Mfs International Value, you can compare the effects of market volatilities on Baillie Gifford and Mfs 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 Mfs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Mfs International.
Diversification Opportunities for Baillie Gifford and Mfs International
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baillie and Mfs is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Mfs International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International Value 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 Mfs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International Value has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Mfs International go up and down completely randomly.
Pair Corralation between Baillie Gifford and Mfs International
Assuming the 90 days horizon Baillie Gifford Health is expected to under-perform the Mfs International. In addition to that, Baillie Gifford is 1.78 times more volatile than Mfs International Value. It trades about -0.01 of its total potential returns per unit of risk. Mfs International Value is currently generating about -0.02 per unit of volatility. If you would invest 4,160 in Mfs International Value on September 1, 2024 and sell it today you would lose (17.00) from holding Mfs International Value or give up 0.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Baillie Gifford Health vs. Mfs International Value
Performance |
| Timeline |
| Baillie Gifford Health |
| Mfs International Value |
Baillie Gifford and Mfs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Mfs International
The main advantage of trading using opposite Baillie Gifford and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Mfs 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 Mfs International will offset losses from the drop in Mfs International's long position.| Baillie Gifford vs. The Eafe Pure | Baillie Gifford vs. The Long Term | Baillie Gifford vs. Baillie Gifford International | Baillie Gifford vs. Baillie Gifford International |
| Mfs International vs. Mfs Prudent Investor | Mfs International vs. Mfs Prudent Investor | Mfs International vs. Mfs Prudent Investor | Mfs International vs. Mfs Prudent Investor |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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