Correlation Between Baillie Gifford and Nasdaq 100
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Nasdaq 100 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 Nasdaq 100 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baillie Gifford International and Nasdaq 100 2x Strategy, you can compare the effects of market volatilities on Baillie Gifford and Nasdaq 100 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 Nasdaq 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Nasdaq 100.
Diversification Opportunities for Baillie Gifford and Nasdaq 100
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Baillie and Nasdaq is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford International and Nasdaq 100 2x Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 2x 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 International are associated (or correlated) with Nasdaq 100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 2x has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Nasdaq 100 go up and down completely randomly.
Pair Corralation between Baillie Gifford and Nasdaq 100
Assuming the 90 days horizon Baillie Gifford is expected to generate 3.1 times less return on investment than Nasdaq 100. But when comparing it to its historical volatility, Baillie Gifford International is 1.55 times less risky than Nasdaq 100. It trades about 0.03 of its potential returns per unit of risk. Nasdaq 100 2x Strategy is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 42,615 in Nasdaq 100 2x Strategy on September 12, 2024 and sell it today you would earn a total of 802.00 from holding Nasdaq 100 2x Strategy or generate 1.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford International vs. Nasdaq 100 2x Strategy
Performance |
| Timeline |
| Baillie Gifford Inte |
| Nasdaq 100 2x |
Baillie Gifford and Nasdaq 100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Nasdaq 100
The main advantage of trading using opposite Baillie Gifford and Nasdaq 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Nasdaq 100 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 Nasdaq 100 will offset losses from the drop in Nasdaq 100's long position.| Baillie Gifford vs. Nasdaq 100 2x Strategy | Baillie Gifford vs. Ep Emerging Markets | Baillie Gifford vs. Black Oak Emerging | Baillie Gifford vs. Rbc Emerging Markets |
| Nasdaq 100 vs. Ambrus Core Bond | Nasdaq 100 vs. Pace High Yield | Nasdaq 100 vs. Franklin High Yield | Nasdaq 100 vs. The National Tax Free |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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