Correlation Between Baillie Gifford and Spectrum Advisors
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Spectrum Advisors 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 Spectrum Advisors 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 Spectrum Advisors Preferred, you can compare the effects of market volatilities on Baillie Gifford and Spectrum Advisors 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 Spectrum Advisors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Spectrum Advisors.
Diversification Opportunities for Baillie Gifford and Spectrum Advisors
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Baillie and Spectrum is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Spectrum Advisors Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectrum Advisors 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 Spectrum Advisors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectrum Advisors has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Spectrum Advisors go up and down completely randomly.
Pair Corralation between Baillie Gifford and Spectrum Advisors
Assuming the 90 days horizon Baillie Gifford Health is expected to under-perform the Spectrum Advisors. In addition to that, Baillie Gifford is 1.55 times more volatile than Spectrum Advisors Preferred. It trades about -0.03 of its total potential returns per unit of risk. Spectrum Advisors Preferred is currently generating about 0.06 per unit of volatility. If you would invest 1,554 in Spectrum Advisors Preferred on September 2, 2024 and sell it today you would earn a total of 288.00 from holding Spectrum Advisors Preferred or generate 18.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Health vs. Spectrum Advisors Preferred
Performance |
| Timeline |
| Baillie Gifford Health |
| Spectrum Advisors |
Baillie Gifford and Spectrum Advisors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Spectrum Advisors
The main advantage of trading using opposite Baillie Gifford and Spectrum Advisors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Spectrum Advisors 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 Spectrum Advisors will offset losses from the drop in Spectrum Advisors' 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 |
| Spectrum Advisors vs. Ontrack E Fund | Spectrum Advisors vs. Ontrack E Fund | Spectrum Advisors vs. Spectrum Unconstrained | Spectrum Advisors vs. Quantified Market Leaders |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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