Correlation Between Guggenheim Risk and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Guggenheim Risk 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 Guggenheim Risk and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guggenheim Risk Managed and Baillie Gifford Eafe, you can compare the effects of market volatilities on Guggenheim Risk 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 Guggenheim Risk with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Risk and Baillie Gifford.
Diversification Opportunities for Guggenheim Risk and Baillie Gifford
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guggenheim and Baillie is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Risk Managed and Baillie Gifford Eafe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford Eafe and Guggenheim Risk 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 Guggenheim Risk Managed 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 Eafe has no effect on the direction of Guggenheim Risk i.e., Guggenheim Risk and Baillie Gifford go up and down completely randomly.
Pair Corralation between Guggenheim Risk and Baillie Gifford
Assuming the 90 days horizon Guggenheim Risk Managed is expected to under-perform the Baillie Gifford. But the mutual fund apears to be less risky and, when comparing its historical volatility, Guggenheim Risk Managed is 2.21 times less risky than Baillie Gifford. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Baillie Gifford Eafe is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,392 in Baillie Gifford Eafe on September 13, 2024 and sell it today you would earn a total of 23.00 from holding Baillie Gifford Eafe or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim Risk Managed vs. Baillie Gifford Eafe
Performance |
| Timeline |
| Guggenheim Risk Managed |
| Baillie Gifford Eafe |
Guggenheim Risk and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Risk and Baillie Gifford
The main advantage of trading using opposite Guggenheim Risk and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Risk 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.| Guggenheim Risk vs. Guggenheim Risk Managed | Guggenheim Risk vs. Guggenheim Risk Managed | Guggenheim Risk vs. Guggenheim Risk Managed | Guggenheim Risk vs. Lazard Global Listed |
| Baillie Gifford vs. Real Estate Ultrasector | Baillie Gifford vs. Nuveen Real Estate | Baillie Gifford vs. Guggenheim Risk Managed | Baillie Gifford vs. Virtus Real Estate |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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