Correlation Between Aquila Tax-free and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Aquila Tax-free and Baillie Gifford 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 Aquila Tax-free and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquila Tax Free Fund and Baillie Gifford Health, you can compare the effects of market volatilities on Aquila Tax-free and Baillie Gifford 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 Aquila Tax-free with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquila Tax-free and Baillie Gifford.
Diversification Opportunities for Aquila Tax-free and Baillie Gifford
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aquila and Baillie is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Aquila Tax Free Fund and Baillie Gifford Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford Health and Aquila Tax-free 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 Aquila Tax Free Fund are associated (or correlated) with Baillie Gifford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baillie Gifford Health has no effect on the direction of Aquila Tax-free i.e., Aquila Tax-free and Baillie Gifford go up and down completely randomly.
Pair Corralation between Aquila Tax-free and Baillie Gifford
Assuming the 90 days horizon Aquila Tax Free Fund is expected to generate 0.17 times more return on investment than Baillie Gifford. However, Aquila Tax Free Fund is 6.02 times less risky than Baillie Gifford. It trades about 0.19 of its potential returns per unit of risk. Baillie Gifford Health is currently generating about -0.11 per unit of risk. If you would invest 969.00 in Aquila Tax Free Fund on August 29, 2024 and sell it today you would earn a total of 10.00 from holding Aquila Tax Free Fund or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aquila Tax Free Fund vs. Baillie Gifford Health
Performance |
| Timeline |
| Aquila Tax Free |
| Baillie Gifford Health |
Aquila Tax-free and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquila Tax-free and Baillie Gifford
The main advantage of trading using opposite Aquila Tax-free and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquila Tax-free position performs unexpectedly, Baillie Gifford 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 Baillie Gifford will offset losses from the drop in Baillie Gifford's long position.| Aquila Tax-free vs. Baillie Gifford Health | Aquila Tax-free vs. Allianzgi Health Sciences | Aquila Tax-free vs. Highland Longshort Healthcare | Aquila Tax-free vs. Baron Health Care |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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