Correlation Between Baillie Gifford and Aqr Sustainable

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Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Aqr Sustainable 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 Aqr Sustainable 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 Aqr Sustainable Long Short, you can compare the effects of market volatilities on Baillie Gifford and Aqr Sustainable 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 Aqr Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Aqr Sustainable.

Diversification Opportunities for Baillie Gifford and Aqr Sustainable

BaillieAqrDiversified AwayBaillieAqrDiversified Away100%
0.13
  Correlation Coefficient

Average diversification

The 3 months correlation between Baillie and Aqr is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Aqr Sustainable Long Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Sustainable Long 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 Aqr Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Sustainable Long has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Aqr Sustainable go up and down completely randomly.

Pair Corralation between Baillie Gifford and Aqr Sustainable

Assuming the 90 days horizon Baillie Gifford Health is expected to under-perform the Aqr Sustainable. In addition to that, Baillie Gifford is 2.03 times more volatile than Aqr Sustainable Long Short. It trades about -0.02 of its total potential returns per unit of risk. Aqr Sustainable Long Short is currently generating about 0.16 per unit of volatility. If you would invest  845.00  in Aqr Sustainable Long Short on November 19, 2024 and sell it today you would earn a total of  553.00  from holding Aqr Sustainable Long Short or generate 65.44% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Baillie Gifford Health  vs.  Aqr Sustainable Long Short

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -505
JavaScript chart by amCharts 3.21.15BGHDX QNZIX
       Timeline  
Baillie Gifford Health 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Baillie Gifford Health are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Baillie Gifford is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb5.455.55.555.65.655.75.755.85.855.9
Aqr Sustainable Long 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Sustainable Long Short are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Aqr Sustainable may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb12.81313.213.413.613.814

Baillie Gifford and Aqr Sustainable Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.37-1.79-1.21-0.63-0.050.511.091.672.252.83 0.20.40.60.8
JavaScript chart by amCharts 3.21.15BGHDX QNZIX
       Returns  

Pair Trading with Baillie Gifford and Aqr Sustainable

The main advantage of trading using opposite Baillie Gifford and Aqr Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Aqr Sustainable 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 Aqr Sustainable will offset losses from the drop in Aqr Sustainable's long position.
The idea behind Baillie Gifford Health and Aqr Sustainable Long Short pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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