Correlation Between Goldman Sachs and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs 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 Goldman Sachs and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Mid and Baillie Gifford Health, you can compare the effects of market volatilities on Goldman Sachs 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 Goldman Sachs with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Baillie Gifford.
Diversification Opportunities for Goldman Sachs and Baillie Gifford
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Goldman and Baillie is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Mid 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 Goldman Sachs 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 Goldman Sachs Mid 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 Goldman Sachs i.e., Goldman Sachs and Baillie Gifford go up and down completely randomly.
Pair Corralation between Goldman Sachs and Baillie Gifford
Assuming the 90 days horizon Goldman Sachs Mid is expected to generate 0.63 times more return on investment than Baillie Gifford. However, Goldman Sachs Mid is 1.58 times less risky than Baillie Gifford. It trades about 0.28 of its potential returns per unit of risk. Baillie Gifford Health is currently generating about -0.05 per unit of risk. If you would invest 3,774 in Goldman Sachs Mid on August 31, 2024 and sell it today you would earn a total of 216.00 from holding Goldman Sachs Mid or generate 5.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Mid vs. Baillie Gifford Health
Performance |
| Timeline |
| Goldman Sachs Mid |
| Baillie Gifford Health |
Goldman Sachs and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Baillie Gifford
The main advantage of trading using opposite Goldman Sachs and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs 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.| Goldman Sachs vs. Baillie Gifford Health | Goldman Sachs vs. Delaware Healthcare Fund | Goldman Sachs vs. Health Care Fund | Goldman Sachs vs. Deutsche Health And |
| Baillie Gifford vs. Vy T Rowe | Baillie Gifford vs. Eaton Vance Atlanta | Baillie Gifford vs. Blackrock Health Sciences | Baillie Gifford vs. Blackrock Health Sciences |
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 Correlations module to find global opportunities by holding instruments from different markets.
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