Correlation Between General Money and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both General Money 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 General Money and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Money Market and Baillie Gifford China, you can compare the effects of market volatilities on General Money 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 General Money with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Money and Baillie Gifford.
Diversification Opportunities for General Money and Baillie Gifford
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between General and Baillie is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding General Money Market and Baillie Gifford China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford China and General Money 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 General Money Market 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 China has no effect on the direction of General Money i.e., General Money and Baillie Gifford go up and down completely randomly.
Pair Corralation between General Money and Baillie Gifford
If you would invest 902.00 in Baillie Gifford China on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Baillie Gifford China or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
General Money Market vs. Baillie Gifford China
Performance |
| Timeline |
| General Money Market |
| Baillie Gifford China |
General Money and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Money and Baillie Gifford
The main advantage of trading using opposite General Money and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Money 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.| General Money vs. Vanguard Total Stock | General Money vs. Vanguard 500 Index | General Money vs. Vanguard Total Stock | General Money vs. Vanguard Total Stock |
| Baillie Gifford vs. Lord Abbett Diversified | Baillie Gifford vs. Wasatch Small Cap | Baillie Gifford vs. T Rowe Price | Baillie Gifford vs. Harbor Diversified International |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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