Correlation Between Baillie Gifford and Vanguard Large-cap
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Vanguard Large-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 Vanguard Large-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 Vanguard Large Cap Index, you can compare the effects of market volatilities on Baillie Gifford and Vanguard Large-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 Vanguard Large-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Vanguard Large-cap.
Diversification Opportunities for Baillie Gifford and Vanguard Large-cap
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baillie and Vanguard is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Vanguard Large Cap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Large 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 Vanguard Large-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Large Cap has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Vanguard Large-cap go up and down completely randomly.
Pair Corralation between Baillie Gifford and Vanguard Large-cap
Assuming the 90 days horizon Baillie Gifford is expected to generate 5.03 times less return on investment than Vanguard Large-cap. In addition to that, Baillie Gifford is 1.42 times more volatile than Vanguard Large Cap Index. It trades about 0.02 of its total potential returns per unit of risk. Vanguard Large Cap Index is currently generating about 0.14 per unit of volatility. If you would invest 49,928 in Vanguard Large Cap Index on September 1, 2024 and sell it today you would earn a total of 7,687 from holding Vanguard Large Cap Index or generate 15.4% 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. Vanguard Large Cap Index
Performance |
| Timeline |
| Baillie Gifford Health |
| Vanguard Large Cap |
Baillie Gifford and Vanguard Large-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Vanguard Large-cap
The main advantage of trading using opposite Baillie Gifford and Vanguard Large-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Vanguard Large-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 Vanguard Large-cap will offset losses from the drop in Vanguard Large-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 |
| Vanguard Large-cap vs. Volumetric Fund Volumetric | Vanguard Large-cap vs. Rbb Fund | Vanguard Large-cap vs. Vanguard Small Cap Growth | Vanguard Large-cap vs. T Rowe Price |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |