Correlation Between Baillie Gifford and Ivy Small
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Ivy 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 Ivy 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 Ivy Small Cap, you can compare the effects of market volatilities on Baillie Gifford and Ivy 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 Ivy Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Ivy Small.
Diversification Opportunities for Baillie Gifford and Ivy Small
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Baillie and Ivy is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Ivy Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy 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 Ivy Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Small Cap has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Ivy Small go up and down completely randomly.
Pair Corralation between Baillie Gifford and Ivy Small
Assuming the 90 days horizon Baillie Gifford Health is expected to under-perform the Ivy Small. In addition to that, Baillie Gifford is 2.13 times more volatile than Ivy Small Cap. It trades about -0.03 of its total potential returns per unit of risk. Ivy Small Cap is currently generating about -0.04 per unit of volatility. If you would invest 1,404 in Ivy Small Cap on September 12, 2024 and sell it today you would lose (15.00) from holding Ivy Small Cap or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Health vs. Ivy Small Cap
Performance |
| Timeline |
| Baillie Gifford Health |
| Ivy Small Cap |
Baillie Gifford and Ivy Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Ivy Small
The main advantage of trading using opposite Baillie Gifford and Ivy Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Ivy 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 Ivy Small will offset losses from the drop in Ivy Small's long position.| Baillie Gifford vs. Lord Abbett Diversified | Baillie Gifford vs. Federated Hermes Conservative | Baillie Gifford vs. Western Asset Diversified | Baillie Gifford vs. Global Diversified Income |
| Ivy Small vs. Morningstar Global Income | Ivy Small vs. Franklin Mutual Global | Ivy Small vs. Mirova Global Green | Ivy Small vs. Kinetics Global Fund |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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