Correlation Between Oil Gas and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Oil Gas 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 Oil Gas and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oil Gas Ultrasector and Baillie Gifford Emerging, you can compare the effects of market volatilities on Oil Gas 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 Oil Gas with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Gas and Baillie Gifford.
Diversification Opportunities for Oil Gas and Baillie Gifford
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oil and Baillie is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Oil Gas Ultrasector and Baillie Gifford Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford Emerging and Oil Gas 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 Oil Gas Ultrasector 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 Emerging has no effect on the direction of Oil Gas i.e., Oil Gas and Baillie Gifford go up and down completely randomly.
Pair Corralation between Oil Gas and Baillie Gifford
Assuming the 90 days horizon Oil Gas Ultrasector is expected to generate 1.91 times more return on investment than Baillie Gifford. However, Oil Gas is 1.91 times more volatile than Baillie Gifford Emerging. It trades about 0.27 of its potential returns per unit of risk. Baillie Gifford Emerging is currently generating about -0.17 per unit of risk. If you would invest 3,660 in Oil Gas Ultrasector on September 4, 2024 and sell it today you would earn a total of 328.00 from holding Oil Gas Ultrasector or generate 8.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Oil Gas Ultrasector vs. Baillie Gifford Emerging
Performance |
| Timeline |
| Oil Gas Ultrasector |
| Baillie Gifford Emerging |
Oil Gas and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oil Gas and Baillie Gifford
The main advantage of trading using opposite Oil Gas and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil Gas 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.| Oil Gas vs. Oil Gas Ultrasector | Oil Gas vs. Ultramid Cap Profund Ultramid Cap | Oil Gas vs. Precious Metals Ultrasector | Oil Gas vs. Real Estate Ultrasector |
| Baillie Gifford vs. Oil Gas Ultrasector | Baillie Gifford vs. World Energy Fund | Baillie Gifford vs. Dreyfus Natural Resources | Baillie Gifford vs. Gmo Resources |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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