Correlation Between Fidelity Emerging and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Fidelity Emerging 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 Fidelity Emerging and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Emerging Markets and Baillie Gifford Health, you can compare the effects of market volatilities on Fidelity Emerging 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 Fidelity Emerging with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Emerging and Baillie Gifford.
Diversification Opportunities for Fidelity Emerging and Baillie Gifford
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Baillie is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Emerging Markets 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 Fidelity Emerging 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 Fidelity Emerging Markets 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 Fidelity Emerging i.e., Fidelity Emerging and Baillie Gifford go up and down completely randomly.
Pair Corralation between Fidelity Emerging and Baillie Gifford
Assuming the 90 days horizon Fidelity Emerging Markets is expected to generate 0.7 times more return on investment than Baillie Gifford. However, Fidelity Emerging Markets is 1.43 times less risky than Baillie Gifford. It trades about 0.03 of its potential returns per unit of risk. Baillie Gifford Health is currently generating about -0.03 per unit of risk. If you would invest 3,437 in Fidelity Emerging Markets on October 11, 2024 and sell it today you would earn a total of 389.00 from holding Fidelity Emerging Markets or generate 11.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Emerging Markets vs. Baillie Gifford Health
Performance |
| Timeline |
| Fidelity Emerging Markets |
| Baillie Gifford Health |
Fidelity Emerging and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Emerging and Baillie Gifford
The main advantage of trading using opposite Fidelity Emerging and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Emerging 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.| Fidelity Emerging vs. Pender Real Estate | Fidelity Emerging vs. Baron Real Estate | Fidelity Emerging vs. Real Estate Ultrasector | Fidelity Emerging vs. Redwood Real Estate |
| Baillie Gifford vs. Ab Small Cap | Baillie Gifford vs. Ab Small Cap | Baillie Gifford vs. Tax Managed Mid Small | Baillie Gifford vs. Sp Smallcap 600 |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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