Correlation Between Baillie Gifford and Deutsche Emerging
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Deutsche Emerging 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 Deutsche Emerging 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 Deutsche Emerging Markets, you can compare the effects of market volatilities on Baillie Gifford and Deutsche Emerging 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 Deutsche Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Deutsche Emerging.
Diversification Opportunities for Baillie Gifford and Deutsche Emerging
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Baillie and Deutsche is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Deutsche Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Emerging Markets 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 Deutsche Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Emerging Markets has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Deutsche Emerging go up and down completely randomly.
Pair Corralation between Baillie Gifford and Deutsche Emerging
Assuming the 90 days horizon Baillie Gifford Health is expected to under-perform the Deutsche Emerging. In addition to that, Baillie Gifford is 2.9 times more volatile than Deutsche Emerging Markets. It trades about -0.03 of its total potential returns per unit of risk. Deutsche Emerging Markets is currently generating about -0.02 per unit of volatility. If you would invest 1,887 in Deutsche Emerging Markets on September 12, 2024 and sell it today you would lose (8.00) from holding Deutsche Emerging Markets or give up 0.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Baillie Gifford Health vs. Deutsche Emerging Markets
Performance |
| Timeline |
| Baillie Gifford Health |
| Deutsche Emerging Markets |
Baillie Gifford and Deutsche Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Deutsche Emerging
The main advantage of trading using opposite Baillie Gifford and Deutsche Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Deutsche Emerging 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 Deutsche Emerging will offset losses from the drop in Deutsche Emerging's long position.| Baillie Gifford vs. Lord Abbett Diversified | Baillie Gifford vs. Federated Hermes Conservative | Baillie Gifford vs. Western Asset Diversified | Baillie Gifford vs. Global Diversified Income |
| Deutsche Emerging vs. Gabelli Convertible And | Deutsche Emerging vs. Absolute Convertible Arbitrage | Deutsche Emerging vs. Rationalpier 88 Convertible | Deutsche Emerging vs. Fidelity Sai Convertible |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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