Correlation Between Baillie Gifford and Columbia Small
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Columbia Small 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 Columbia Small 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 Columbia Small Cap, you can compare the effects of market volatilities on Baillie Gifford and Columbia Small 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 Columbia Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Columbia Small.
Diversification Opportunities for Baillie Gifford and Columbia Small
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Baillie and Columbia is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Columbia Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Small Cap 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 Columbia Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Small Cap has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Columbia Small go up and down completely randomly.
Pair Corralation between Baillie Gifford and Columbia Small
Assuming the 90 days horizon Baillie Gifford Health is expected to under-perform the Columbia Small. In addition to that, Baillie Gifford is 1.01 times more volatile than Columbia Small Cap. It trades about -0.01 of its total potential returns per unit of risk. Columbia Small Cap is currently generating about 0.02 per unit of volatility. If you would invest 2,186 in Columbia Small Cap on September 14, 2024 and sell it today you would earn a total of 223.00 from holding Columbia Small Cap or generate 10.2% 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. Columbia Small Cap
Performance |
| Timeline |
| Baillie Gifford Health |
| Columbia Small Cap |
Baillie Gifford and Columbia Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Columbia Small
The main advantage of trading using opposite Baillie Gifford and Columbia Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Columbia Small 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 Columbia Small will offset losses from the drop in Columbia Small's long position.| Baillie Gifford vs. Ab Select Equity | Baillie Gifford vs. Ab Fixed Income Shares | Baillie Gifford vs. Cutler Equity | Baillie Gifford vs. Us Strategic Equity |
| Columbia Small vs. Baillie Gifford Health | Columbia Small vs. Vanguard Health Care | Columbia Small vs. Alger Health Sciences | Columbia Small vs. Hartford Healthcare Hls |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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