Correlation Between Baillie Gifford and International Investors
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and International Investors 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 International Investors 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 International Investors Gold, you can compare the effects of market volatilities on Baillie Gifford and International Investors 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 International Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and International Investors.
Diversification Opportunities for Baillie Gifford and International Investors
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Baillie and International is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford International and International Investors Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Investors 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 International Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Investors has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and International Investors go up and down completely randomly.
Pair Corralation between Baillie Gifford and International Investors
Assuming the 90 days horizon Baillie Gifford International is expected to generate 0.41 times more return on investment than International Investors. However, Baillie Gifford International is 2.43 times less risky than International Investors. It trades about -0.16 of its potential returns per unit of risk. International Investors Gold is currently generating about -0.15 per unit of risk. If you would invest 1,439 in Baillie Gifford International on September 4, 2024 and sell it today you would lose (40.00) from holding Baillie Gifford International or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford International vs. International Investors Gold
Performance |
| Timeline |
| Baillie Gifford Inte |
| International Investors |
Baillie Gifford and International Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and International Investors
The main advantage of trading using opposite Baillie Gifford and International Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, International Investors 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 International Investors will offset losses from the drop in International Investors' long position.| Baillie Gifford vs. International Investors Gold | Baillie Gifford vs. Short Precious Metals | Baillie Gifford vs. Great West Goldman Sachs | Baillie Gifford vs. Goldman Sachs Short |
| International Investors vs. Ambrus Core Bond | International Investors vs. The National Tax Free | International Investors vs. California Bond Fund | International Investors 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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