Correlation Between Baillie Gifford and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Old Westbury 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 Old Westbury 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 Old Westbury Fixed, you can compare the effects of market volatilities on Baillie Gifford and Old Westbury 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 Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Old Westbury.
Diversification Opportunities for Baillie Gifford and Old Westbury
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baillie and Old is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Old Westbury Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Fixed 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 Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Fixed has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Old Westbury go up and down completely randomly.
Pair Corralation between Baillie Gifford and Old Westbury
Assuming the 90 days horizon Baillie Gifford Health is expected to under-perform the Old Westbury. In addition to that, Baillie Gifford is 4.78 times more volatile than Old Westbury Fixed. It trades about -0.01 of its total potential returns per unit of risk. Old Westbury Fixed is currently generating about -0.04 per unit of volatility. If you would invest 1,024 in Old Westbury Fixed on September 2, 2024 and sell it today you would lose (6.00) from holding Old Westbury Fixed or give up 0.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Health vs. Old Westbury Fixed
Performance |
| Timeline |
| Baillie Gifford Health |
| Old Westbury Fixed |
Baillie Gifford and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Old Westbury
The main advantage of trading using opposite Baillie Gifford and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury'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 |
| Old Westbury vs. Old Westbury All | Old Westbury vs. Old Westbury California | Old Westbury vs. Old Westbury Credit | Old Westbury vs. Old Westbury Large |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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