Correlation Between Baillie Gifford and New Perspective
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and New Perspective 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 New Perspective 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 New Perspective Fund, you can compare the effects of market volatilities on Baillie Gifford and New Perspective 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 New Perspective. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and New Perspective.
Diversification Opportunities for Baillie Gifford and New Perspective
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Baillie and New is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and New Perspective Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Perspective 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 New Perspective. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Perspective has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and New Perspective go up and down completely randomly.
Pair Corralation between Baillie Gifford and New Perspective
Assuming the 90 days horizon Baillie Gifford Health is expected to under-perform the New Perspective. In addition to that, Baillie Gifford is 1.88 times more volatile than New Perspective Fund. It trades about -0.22 of its total potential returns per unit of risk. New Perspective Fund is currently generating about 0.01 per unit of volatility. If you would invest 6,016 in New Perspective Fund on August 27, 2024 and sell it today you would earn a total of 3.00 from holding New Perspective Fund or generate 0.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Health vs. New Perspective Fund
Performance |
| Timeline |
| Baillie Gifford Health |
| New Perspective |
Baillie Gifford and New Perspective Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and New Perspective
The main advantage of trading using opposite Baillie Gifford and New Perspective positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, New Perspective 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 New Perspective will offset losses from the drop in New Perspective's long position.| Baillie Gifford vs. Calamos Dynamic Convertible | Baillie Gifford vs. Allianzgi Vertible Fund | Baillie Gifford vs. Allianzgi Convertible Income | Baillie Gifford vs. Invesco Vertible Securities |
| New Perspective vs. Wells Fargo Advantage | New Perspective vs. Fidelity Advisor Gold | New Perspective vs. James Balanced Golden | New Perspective vs. Invesco Gold Special |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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