Correlation Between Empire Metals and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Empire Metals 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 Empire Metals and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire Metals Limited and Baillie Gifford European, you can compare the effects of market volatilities on Empire Metals 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 Empire Metals with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire Metals and Baillie Gifford.
Diversification Opportunities for Empire Metals and Baillie Gifford
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Empire and Baillie is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Empire Metals Limited and Baillie Gifford European in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford European and Empire Metals 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 Empire Metals Limited 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 European has no effect on the direction of Empire Metals i.e., Empire Metals and Baillie Gifford go up and down completely randomly.
Pair Corralation between Empire Metals and Baillie Gifford
Assuming the 90 days trading horizon Empire Metals Limited is expected to generate 6.05 times more return on investment than Baillie Gifford. However, Empire Metals is 6.05 times more volatile than Baillie Gifford European. It trades about 0.05 of its potential returns per unit of risk. Baillie Gifford European is currently generating about 0.22 per unit of risk. If you would invest 610.00 in Empire Metals Limited on September 20, 2024 and sell it today you would earn a total of 15.00 from holding Empire Metals Limited or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empire Metals Limited vs. Baillie Gifford European
Performance |
| Timeline |
| Empire Metals Limited |
| Baillie Gifford European |
Empire Metals and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire Metals and Baillie Gifford
The main advantage of trading using opposite Empire Metals and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire Metals 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.| Empire Metals vs. Givaudan SA | Empire Metals vs. Antofagasta PLC | Empire Metals vs. Ferrexpo PLC | Empire Metals vs. Atalaya Mining |
| Baillie Gifford vs. Cairo Communication SpA | Baillie Gifford vs. Empire Metals Limited | Baillie Gifford vs. European Metals Holdings | Baillie Gifford vs. Zoom Video Communications |
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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