Correlation Between Davis Financial and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Davis Financial 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 Davis Financial and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Davis Financial Fund and Baillie Gifford Health, you can compare the effects of market volatilities on Davis Financial 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 Davis Financial with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Davis Financial and Baillie Gifford.
Diversification Opportunities for Davis Financial and Baillie Gifford
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Davis and Baillie is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Davis Financial 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 Davis Financial 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 Davis Financial 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 Davis Financial i.e., Davis Financial and Baillie Gifford go up and down completely randomly.
Pair Corralation between Davis Financial and Baillie Gifford
Assuming the 90 days horizon Davis Financial Fund is expected to generate 0.64 times more return on investment than Baillie Gifford. However, Davis Financial Fund is 1.55 times less risky than Baillie Gifford. It trades about 0.02 of its potential returns per unit of risk. Baillie Gifford Health is currently generating about -0.01 per unit of risk. If you would invest 7,050 in Davis Financial Fund on November 6, 2024 and sell it today you would earn a total of 44.00 from holding Davis Financial Fund or generate 0.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Davis Financial Fund vs. Baillie Gifford Health
Performance |
| Timeline |
| Davis Financial |
| Baillie Gifford Health |
Davis Financial and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Davis Financial and Baillie Gifford
The main advantage of trading using opposite Davis Financial and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Davis Financial 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.| Davis Financial vs. Gabelli Global Financial | Davis Financial vs. Mesirow Financial Small | Davis Financial vs. Icon Financial Fund | Davis Financial vs. Blackrock Financial Institutions |
| Baillie Gifford vs. T Rowe Price | Baillie Gifford vs. Rational Strategic Allocation | Baillie Gifford vs. Pnc Balanced Allocation | Baillie Gifford vs. Rbb 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |