Correlation Between Baillie Gifford and Nasdaq-100 Index
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Nasdaq-100 Index 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 Nasdaq-100 Index 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 Nasdaq 100 Index Fund, you can compare the effects of market volatilities on Baillie Gifford and Nasdaq-100 Index 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 Nasdaq-100 Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Nasdaq-100 Index.
Diversification Opportunities for Baillie Gifford and Nasdaq-100 Index
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baillie and NASDAQ-100 is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Nasdaq 100 Index Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 Index 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 Nasdaq-100 Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 Index has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Nasdaq-100 Index go up and down completely randomly.
Pair Corralation between Baillie Gifford and Nasdaq-100 Index
Assuming the 90 days horizon Baillie Gifford Health is expected to under-perform the Nasdaq-100 Index. In addition to that, Baillie Gifford is 1.28 times more volatile than Nasdaq 100 Index Fund. It trades about -0.12 of its total potential returns per unit of risk. Nasdaq 100 Index Fund is currently generating about 0.04 per unit of volatility. If you would invest 3,955 in Nasdaq 100 Index Fund on August 30, 2024 and sell it today you would earn a total of 38.00 from holding Nasdaq 100 Index Fund or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Health vs. Nasdaq 100 Index Fund
Performance |
| Timeline |
| Baillie Gifford Health |
| Nasdaq 100 Index |
Baillie Gifford and Nasdaq-100 Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Nasdaq-100 Index
The main advantage of trading using opposite Baillie Gifford and Nasdaq-100 Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Nasdaq-100 Index 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 Nasdaq-100 Index will offset losses from the drop in Nasdaq-100 Index's long position.| Baillie Gifford vs. Fidelity Advisor Technology | Baillie Gifford vs. Fidelity Advisor Biotechnology | Baillie Gifford vs. Fidelity Advisor Financial | Baillie Gifford vs. Fidelity Advisor Utilities |
| Nasdaq-100 Index vs. Virtus Seix Government | Nasdaq-100 Index vs. Franklin Adjustable Government | Nasdaq-100 Index vs. Us Government Securities | Nasdaq-100 Index vs. Prudential Government Income |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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