Correlation Between Baillie Gifford and Extended Market
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Extended Market 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 Extended Market 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 Extended Market Index, you can compare the effects of market volatilities on Baillie Gifford and Extended Market 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 Extended Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Extended Market.
Diversification Opportunities for Baillie Gifford and Extended Market
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Baillie and Extended is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Extended Market Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Extended Market Index 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 Extended Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Extended Market Index has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Extended Market go up and down completely randomly.
Pair Corralation between Baillie Gifford and Extended Market
If you would invest 2,040 in Extended Market Index on October 20, 2024 and sell it today you would earn a total of 58.00 from holding Extended Market Index or generate 2.84% 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. Extended Market Index
Performance |
| Timeline |
| Baillie Gifford Health |
| Extended Market Index |
Baillie Gifford and Extended Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Extended Market
The main advantage of trading using opposite Baillie Gifford and Extended Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Extended Market 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 Extended Market will offset losses from the drop in Extended Market's long position.| Baillie Gifford vs. Fpa Queens Road | Baillie Gifford vs. Vanguard Small Cap Value | Baillie Gifford vs. American Century Etf | Baillie Gifford vs. Mutual Of America |
| Extended Market vs. Lord Abbett Health | Extended Market vs. Deutsche Health And | Extended Market vs. Hartford Healthcare Hls | Extended Market vs. Baillie Gifford Health |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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