Correlation Between Baillie Gifford and Global Alpha
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Global Alpha 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 Global Alpha 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 The Global Alpha, you can compare the effects of market volatilities on Baillie Gifford and Global Alpha 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 Global Alpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Global Alpha.
Diversification Opportunities for Baillie Gifford and Global Alpha
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baillie and Global is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford International and The Global Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Alpha 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 Global Alpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Alpha has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Global Alpha go up and down completely randomly.
Pair Corralation between Baillie Gifford and Global Alpha
Assuming the 90 days horizon Baillie Gifford is expected to generate 4.05 times less return on investment than Global Alpha. But when comparing it to its historical volatility, Baillie Gifford International is 1.03 times less risky than Global Alpha. It trades about 0.02 of its potential returns per unit of risk. The Global Alpha is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,814 in The Global Alpha on August 31, 2024 and sell it today you would earn a total of 32.00 from holding The Global Alpha or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford International vs. The Global Alpha
Performance |
| Timeline |
| Baillie Gifford Inte |
| Global Alpha |
Baillie Gifford and Global Alpha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Global Alpha
The main advantage of trading using opposite Baillie Gifford and Global Alpha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Global Alpha 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 Global Alpha will offset losses from the drop in Global Alpha's long position.| Baillie Gifford vs. Europacific Growth Fund | Baillie Gifford vs. Europacific Growth Fund | Baillie Gifford vs. HUMANA INC | Baillie Gifford vs. Aquagold International |
| Global Alpha vs. American Funds New | Global Alpha vs. New Perspective Fund | Global Alpha vs. New Perspective Fund | Global Alpha vs. New Perspective 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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