Correlation Between Baillie Gifford and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Goldman Sachs 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 Goldman Sachs 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 Goldman Sachs Tax Advantaged, you can compare the effects of market volatilities on Baillie Gifford and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Goldman Sachs.
Diversification Opportunities for Baillie Gifford and Goldman Sachs
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Baillie and Goldman is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Goldman Sachs Tax Advantaged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Tax 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Tax has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Goldman Sachs go up and down completely randomly.
Pair Corralation between Baillie Gifford and Goldman Sachs
Assuming the 90 days horizon Baillie Gifford is expected to generate 2.78 times less return on investment than Goldman Sachs. In addition to that, Baillie Gifford is 1.97 times more volatile than Goldman Sachs Tax Advantaged. It trades about 0.02 of its total potential returns per unit of risk. Goldman Sachs Tax Advantaged is currently generating about 0.14 per unit of volatility. If you would invest 2,062 in Goldman Sachs Tax Advantaged on September 14, 2024 and sell it today you would earn a total of 574.00 from holding Goldman Sachs Tax Advantaged or generate 27.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Health vs. Goldman Sachs Tax Advantaged
Performance |
| Timeline |
| Baillie Gifford Health |
| Goldman Sachs Tax |
Baillie Gifford and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Goldman Sachs
The main advantage of trading using opposite Baillie Gifford and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' 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 |
| Goldman Sachs vs. Lord Abbett Health | Goldman Sachs vs. Alger Health Sciences | Goldman Sachs vs. Baillie Gifford Health | Goldman Sachs vs. Hartford Healthcare Hls |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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