Correlation Between Baillie Gifford and Mid Cap
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Mid Cap 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 Mid Cap 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 Mid Cap 15x Strategy, you can compare the effects of market volatilities on Baillie Gifford and Mid Cap 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 Mid Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Mid Cap.
Diversification Opportunities for Baillie Gifford and Mid Cap
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Baillie and Mid is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Mid Cap 15x Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap 15x 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 Mid Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Cap 15x has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Mid Cap go up and down completely randomly.
Pair Corralation between Baillie Gifford and Mid Cap
Assuming the 90 days horizon Baillie Gifford Health is expected to generate 2.05 times more return on investment than Mid Cap. However, Baillie Gifford is 2.05 times more volatile than Mid Cap 15x Strategy. It trades about 0.02 of its potential returns per unit of risk. Mid Cap 15x Strategy is currently generating about 0.01 per unit of risk. If you would invest 580.00 in Baillie Gifford Health on September 14, 2024 and sell it today you would earn a total of 4.00 from holding Baillie Gifford Health or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Health vs. Mid Cap 15x Strategy
Performance |
| Timeline |
| Baillie Gifford Health |
| Mid Cap 15x |
Baillie Gifford and Mid Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Mid Cap
The main advantage of trading using opposite Baillie Gifford and Mid Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Mid Cap 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 Mid Cap will offset losses from the drop in Mid Cap's long position.| Baillie Gifford vs. Ab Select Equity | Baillie Gifford vs. Ab Fixed Income Shares | Baillie Gifford vs. Cutler Equity | Baillie Gifford vs. Us Strategic Equity |
| Mid Cap vs. Baillie Gifford Health | Mid Cap vs. Lord Abbett Health | Mid Cap vs. Allianzgi Health Sciences | Mid Cap vs. Vanguard Health Care |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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