Correlation Between Baillie Gifford and Sierra Tactical
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Sierra Tactical 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 Sierra Tactical 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 Sierra Tactical Municipal, you can compare the effects of market volatilities on Baillie Gifford and Sierra Tactical 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 Sierra Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Sierra Tactical.
Diversification Opportunities for Baillie Gifford and Sierra Tactical
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Baillie and Sierra is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Sierra Tactical Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sierra Tactical Municipal 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 Sierra Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sierra Tactical Municipal has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Sierra Tactical go up and down completely randomly.
Pair Corralation between Baillie Gifford and Sierra Tactical
Assuming the 90 days horizon Baillie Gifford Health is expected to under-perform the Sierra Tactical. In addition to that, Baillie Gifford is 4.18 times more volatile than Sierra Tactical Municipal. It trades about -0.01 of its total potential returns per unit of risk. Sierra Tactical Municipal is currently generating about 0.18 per unit of volatility. If you would invest 2,551 in Sierra Tactical Municipal on September 1, 2024 and sell it today you would earn a total of 36.00 from holding Sierra Tactical Municipal or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Baillie Gifford Health vs. Sierra Tactical Municipal
Performance |
| Timeline |
| Baillie Gifford Health |
| Sierra Tactical Municipal |
Baillie Gifford and Sierra Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Sierra Tactical
The main advantage of trading using opposite Baillie Gifford and Sierra Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Sierra Tactical 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 Sierra Tactical will offset losses from the drop in Sierra Tactical'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 |
| Sierra Tactical vs. Sierra Tactical Risk | Sierra Tactical vs. Sierra Tactical Risk | Sierra Tactical vs. Sierra Tactical Risk | Sierra Tactical vs. Sierra Tactical Risk |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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