Correlation Between Baillie Gifford and Barings Emerging
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Barings Emerging 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 Barings Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baillie Gifford Discovery and Barings Emerging Markets, you can compare the effects of market volatilities on Baillie Gifford and Barings Emerging 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 Barings Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Barings Emerging.
Diversification Opportunities for Baillie Gifford and Barings Emerging
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Baillie and Barings is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Discovery and Barings Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Emerging Markets 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 Discovery are associated (or correlated) with Barings Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Emerging Markets has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Barings Emerging go up and down completely randomly.
Pair Corralation between Baillie Gifford and Barings Emerging
Assuming the 90 days horizon Baillie Gifford Discovery is expected to generate 4.2 times more return on investment than Barings Emerging. However, Baillie Gifford is 4.2 times more volatile than Barings Emerging Markets. It trades about 0.04 of its potential returns per unit of risk. Barings Emerging Markets is currently generating about 0.07 per unit of risk. If you would invest 479.00 in Baillie Gifford Discovery on September 5, 2024 and sell it today you would earn a total of 131.00 from holding Baillie Gifford Discovery or generate 27.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Baillie Gifford Discovery vs. Barings Emerging Markets
Performance |
| Timeline |
| Baillie Gifford Discovery |
| Barings Emerging Markets |
Baillie Gifford and Barings Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Barings Emerging
The main advantage of trading using opposite Baillie Gifford and Barings Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Barings Emerging 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 Barings Emerging will offset losses from the drop in Barings Emerging's long position.| Baillie Gifford vs. Barings Emerging Markets | Baillie Gifford vs. Western Assets Emerging | Baillie Gifford vs. Kinetics Market Opportunities | Baillie Gifford vs. Shelton Emerging Markets |
| Barings Emerging vs. Small Cap Stock | Barings Emerging vs. Commodities Strategy Fund | Barings Emerging vs. Growth Strategy Fund | Barings Emerging vs. Omni Small Cap Value |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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