Correlation Between Baillie Gifford and Allianzgi Health
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Allianzgi Health 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 Allianzgi Health 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 Allianzgi Health Sciences, you can compare the effects of market volatilities on Baillie Gifford and Allianzgi Health 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 Allianzgi Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Allianzgi Health.
Diversification Opportunities for Baillie Gifford and Allianzgi Health
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baillie and ALLIANZGI is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Allianzgi Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Health Sciences 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 Allianzgi Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Health Sciences has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Allianzgi Health go up and down completely randomly.
Pair Corralation between Baillie Gifford and Allianzgi Health
Assuming the 90 days horizon Baillie Gifford Health is expected to under-perform the Allianzgi Health. In addition to that, Baillie Gifford is 1.47 times more volatile than Allianzgi Health Sciences. It trades about -0.12 of its total potential returns per unit of risk. Allianzgi Health Sciences is currently generating about -0.04 per unit of volatility. If you would invest 2,937 in Allianzgi Health Sciences on August 29, 2024 and sell it today you would lose (30.00) from holding Allianzgi Health Sciences or give up 1.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Health vs. Allianzgi Health Sciences
Performance |
| Timeline |
| Baillie Gifford Health |
| Allianzgi Health Sciences |
Baillie Gifford and Allianzgi Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Allianzgi Health
The main advantage of trading using opposite Baillie Gifford and Allianzgi Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Allianzgi Health 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 Allianzgi Health will offset losses from the drop in Allianzgi Health'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 |
| Allianzgi Health vs. Small Cap Stock | Allianzgi Health vs. Materials Portfolio Fidelity | Allianzgi Health vs. Multimedia Portfolio Multimedia | Allianzgi Health vs. Morgan Stanley Institutional |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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