Correlation Between Baillie Gifford and Gmo Resources
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Gmo Resources 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 Gmo Resources 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 Gmo Resources, you can compare the effects of market volatilities on Baillie Gifford and Gmo Resources 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 Gmo Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Gmo Resources.
Diversification Opportunities for Baillie Gifford and Gmo Resources
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baillie and Gmo is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford International and Gmo Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Resources 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 Gmo Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Resources has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Gmo Resources go up and down completely randomly.
Pair Corralation between Baillie Gifford and Gmo Resources
Assuming the 90 days horizon Baillie Gifford International is expected to generate 0.62 times more return on investment than Gmo Resources. However, Baillie Gifford International is 1.6 times less risky than Gmo Resources. It trades about 0.04 of its potential returns per unit of risk. Gmo Resources is currently generating about -0.05 per unit of risk. If you would invest 1,401 in Baillie Gifford International on September 3, 2024 and sell it today you would earn a total of 58.00 from holding Baillie Gifford International or generate 4.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford International vs. Gmo Resources
Performance |
| Timeline |
| Baillie Gifford Inte |
| Gmo Resources |
Baillie Gifford and Gmo Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Gmo Resources
The main advantage of trading using opposite Baillie Gifford and Gmo Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Gmo Resources 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 Gmo Resources will offset losses from the drop in Gmo Resources' long position.| Baillie Gifford vs. Dws Government Money | Baillie Gifford vs. Dreyfus Government Cash | Baillie Gifford vs. Ab Government Exchange | Baillie Gifford vs. Franklin Adjustable Government |
| Gmo Resources vs. Commonwealth Global Fund | Gmo Resources vs. Qs Growth Fund | Gmo Resources vs. Small Cap Stock | Gmo Resources vs. Growth Strategy 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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