Correlation Between Baillie Gifford and Vanguard Emerging
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Vanguard Emerging 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 Vanguard Emerging 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 Vanguard Emerging Markets, you can compare the effects of market volatilities on Baillie Gifford and Vanguard Emerging 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 Vanguard Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Vanguard Emerging.
Diversification Opportunities for Baillie Gifford and Vanguard Emerging
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Baillie and Vanguard is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Vanguard Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Emerging Markets 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 Vanguard Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Emerging Markets has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Vanguard Emerging go up and down completely randomly.
Pair Corralation between Baillie Gifford and Vanguard Emerging
Assuming the 90 days horizon Baillie Gifford Health is expected to generate 1.41 times more return on investment than Vanguard Emerging. However, Baillie Gifford is 1.41 times more volatile than Vanguard Emerging Markets. It trades about -0.02 of its potential returns per unit of risk. Vanguard Emerging Markets is currently generating about -0.18 per unit of risk. If you would invest 590.00 in Baillie Gifford Health on September 3, 2024 and sell it today you would lose (7.00) from holding Baillie Gifford Health or give up 1.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Health vs. Vanguard Emerging Markets
Performance |
| Timeline |
| Baillie Gifford Health |
| Vanguard Emerging Markets |
Baillie Gifford and Vanguard Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Vanguard Emerging
The main advantage of trading using opposite Baillie Gifford and Vanguard Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Vanguard Emerging 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 Vanguard Emerging will offset losses from the drop in Vanguard Emerging's long position.| Baillie Gifford vs. Legg Mason Partners | Baillie Gifford vs. T Rowe Price | Baillie Gifford vs. Black Oak Emerging | Baillie Gifford vs. Templeton Emerging Markets |
| Vanguard Emerging vs. Forum Real Estate | Vanguard Emerging vs. Fidelity Real Estate | Vanguard Emerging vs. Commonwealth Real Estate | Vanguard Emerging vs. Us Real Estate |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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