Correlation Between Quantitative Longshort and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Quantitative Longshort 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 Quantitative Longshort and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quantitative Longshort Equity and Baillie Gifford Emerging, you can compare the effects of market volatilities on Quantitative Longshort 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 Quantitative Longshort with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quantitative Longshort and Baillie Gifford.
Diversification Opportunities for Quantitative Longshort and Baillie Gifford
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Quantitative and Baillie is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Quantitative Longshort Equity 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 Quantitative Longshort 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 Quantitative Longshort Equity 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 Quantitative Longshort i.e., Quantitative Longshort and Baillie Gifford go up and down completely randomly.
Pair Corralation between Quantitative Longshort and Baillie Gifford
Assuming the 90 days horizon Quantitative Longshort Equity is expected to generate 0.37 times more return on investment than Baillie Gifford. However, Quantitative Longshort Equity is 2.69 times less risky than Baillie Gifford. It trades about 0.14 of its potential returns per unit of risk. Baillie Gifford Emerging is currently generating about 0.01 per unit of risk. If you would invest 1,358 in Quantitative Longshort Equity on September 3, 2024 and sell it today you would earn a total of 112.00 from holding Quantitative Longshort Equity or generate 8.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quantitative Longshort Equity vs. Baillie Gifford Emerging
Performance |
| Timeline |
| Quantitative Longshort |
| Baillie Gifford Emerging |
Quantitative Longshort and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quantitative Longshort and Baillie Gifford
The main advantage of trading using opposite Quantitative Longshort and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quantitative Longshort 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.| Quantitative Longshort vs. Neuberger Berman Long | Quantitative Longshort vs. Diamond Hill Long Short | Quantitative Longshort vs. Diamond Hill Long Short |
| Baillie Gifford vs. Guggenheim High Yield | Baillie Gifford vs. Blackrock High Yield | Baillie Gifford vs. Dunham High Yield | Baillie Gifford vs. Gmo High Yield |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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