Correlation Between Baillie Gifford and Pace Strategic
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Pace Strategic 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 Pace Strategic 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 Pace Strategic Fixed, you can compare the effects of market volatilities on Baillie Gifford and Pace Strategic 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 Pace Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Pace Strategic.
Diversification Opportunities for Baillie Gifford and Pace Strategic
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baillie and Pace is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Pace Strategic Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Strategic 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 Pace Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Strategic Fixed has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Pace Strategic go up and down completely randomly.
Pair Corralation between Baillie Gifford and Pace Strategic
Assuming the 90 days horizon Baillie Gifford Health is expected to under-perform the Pace Strategic. In addition to that, Baillie Gifford is 7.7 times more volatile than Pace Strategic Fixed. It trades about -0.02 of its total potential returns per unit of risk. Pace Strategic Fixed is currently generating about -0.09 per unit of volatility. If you would invest 1,184 in Pace Strategic Fixed on September 13, 2024 and sell it today you would lose (11.00) from holding Pace Strategic Fixed or give up 0.93% 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. Pace Strategic Fixed
Performance |
| Timeline |
| Baillie Gifford Health |
| Pace Strategic Fixed |
Baillie Gifford and Pace Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Pace Strategic
The main advantage of trading using opposite Baillie Gifford and Pace Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Pace Strategic 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 Pace Strategic will offset losses from the drop in Pace Strategic's long position.| Baillie Gifford vs. Jhancock Disciplined Value | Baillie Gifford vs. Aqr Large Cap | Baillie Gifford vs. Fisher Large Cap | Baillie Gifford vs. Enhanced Large Pany |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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