Correlation Between Baillie Gifford and Timothy Large/mid-cap
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Timothy Large/mid-cap 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 Timothy Large/mid-cap 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 Timothy Largemid Cap Value, you can compare the effects of market volatilities on Baillie Gifford and Timothy Large/mid-cap 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 Timothy Large/mid-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Timothy Large/mid-cap.
Diversification Opportunities for Baillie Gifford and Timothy Large/mid-cap
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Baillie and Timothy is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Timothy Largemid Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Large/mid-cap 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 Timothy Large/mid-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timothy Large/mid-cap has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Timothy Large/mid-cap go up and down completely randomly.
Pair Corralation between Baillie Gifford and Timothy Large/mid-cap
Assuming the 90 days horizon Baillie Gifford Health is expected to under-perform the Timothy Large/mid-cap. In addition to that, Baillie Gifford is 1.54 times more volatile than Timothy Largemid Cap Value. It trades about -0.01 of its total potential returns per unit of risk. Timothy Largemid Cap Value is currently generating about 0.08 per unit of volatility. If you would invest 1,785 in Timothy Largemid Cap Value on September 2, 2024 and sell it today you would earn a total of 64.00 from holding Timothy Largemid Cap Value or generate 3.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Health vs. Timothy Largemid Cap Value
Performance |
| Timeline |
| Baillie Gifford Health |
| Timothy Large/mid-cap |
Baillie Gifford and Timothy Large/mid-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Timothy Large/mid-cap
The main advantage of trading using opposite Baillie Gifford and Timothy Large/mid-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Timothy Large/mid-cap 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 Timothy Large/mid-cap will offset losses from the drop in Timothy Large/mid-cap'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 |
| Timothy Large/mid-cap vs. Timothy Fixed Income | Timothy Large/mid-cap vs. Timothy Fixed Income | Timothy Large/mid-cap vs. Timothy Plan Growth | Timothy Large/mid-cap vs. Timothy Plan Growth |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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