Correlation Between Baillie Gifford and Wasatch Small
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Wasatch Small 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 Wasatch Small 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 Wasatch Small Cap, you can compare the effects of market volatilities on Baillie Gifford and Wasatch Small 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 Wasatch Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Wasatch Small.
Diversification Opportunities for Baillie Gifford and Wasatch Small
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Baillie and Wasatch is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Wasatch Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch Small 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 Wasatch Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch Small Cap has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Wasatch Small go up and down completely randomly.
Pair Corralation between Baillie Gifford and Wasatch Small
Assuming the 90 days horizon Baillie Gifford Health is expected to generate 0.66 times more return on investment than Wasatch Small. However, Baillie Gifford Health is 1.51 times less risky than Wasatch Small. It trades about -0.01 of its potential returns per unit of risk. Wasatch Small Cap is currently generating about -0.07 per unit of risk. If you would invest 586.00 in Baillie Gifford Health on December 4, 2024 and sell it today you would lose (13.00) from holding Baillie Gifford Health or give up 2.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Health vs. Wasatch Small Cap
Performance |
| Timeline |
| Baillie Gifford Health |
| Wasatch Small Cap |
Baillie Gifford and Wasatch Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Wasatch Small
The main advantage of trading using opposite Baillie Gifford and Wasatch Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Wasatch Small 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 Wasatch Small will offset losses from the drop in Wasatch Small's long position.| Baillie Gifford vs. Federated Hermes Conservative | Baillie Gifford vs. Tiaa Cref Lifestyle Conservative | Baillie Gifford vs. Massmutual Premier Diversified | Baillie Gifford vs. Jhancock Diversified Macro |
| Wasatch Small vs. John Hancock Money | Wasatch Small vs. Tiaa Cref Funds | Wasatch Small vs. Franklin Government Money | Wasatch Small vs. Prudential Emerging Markets |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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