Correlation Between Baillie Gifford and Tekla Healthcare
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Tekla Healthcare 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 Tekla Healthcare 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 Tekla Healthcare Opportunities, you can compare the effects of market volatilities on Baillie Gifford and Tekla Healthcare 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 Tekla Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Tekla Healthcare.
Diversification Opportunities for Baillie Gifford and Tekla Healthcare
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baillie and Tekla is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Tekla Healthcare Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekla Healthcare Opp 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 Tekla Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekla Healthcare Opp has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Tekla Healthcare go up and down completely randomly.
Pair Corralation between Baillie Gifford and Tekla Healthcare
Assuming the 90 days horizon Baillie Gifford Health is expected to under-perform the Tekla Healthcare. But the mutual fund apears to be less risky and, when comparing its historical volatility, Baillie Gifford Health is 1.07 times less risky than Tekla Healthcare. The mutual fund trades about -0.22 of its potential returns per unit of risk. The Tekla Healthcare Opportunities is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 2,105 in Tekla Healthcare Opportunities on August 27, 2024 and sell it today you would lose (75.00) from holding Tekla Healthcare Opportunities or give up 3.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Health vs. Tekla Healthcare Opportunities
Performance |
| Timeline |
| Baillie Gifford Health |
| Tekla Healthcare Opp |
Baillie Gifford and Tekla Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Tekla Healthcare
The main advantage of trading using opposite Baillie Gifford and Tekla Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Tekla Healthcare 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 Tekla Healthcare will offset losses from the drop in Tekla Healthcare'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 |
| Tekla Healthcare vs. Tekla Healthcare Investors | Tekla Healthcare vs. Tekla Life Sciences | Tekla Healthcare vs. Cohen Steers Reit | Tekla Healthcare vs. XAI Octagon Floating |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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