Correlation Between Herald Investment and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Herald Investment 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 Herald Investment and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Herald Investment Trust and Baillie Gifford European, you can compare the effects of market volatilities on Herald Investment 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 Herald Investment with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herald Investment and Baillie Gifford.
Diversification Opportunities for Herald Investment and Baillie Gifford
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Herald and Baillie is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Herald Investment Trust and Baillie Gifford European in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford European and Herald Investment 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 Herald Investment Trust 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 European has no effect on the direction of Herald Investment i.e., Herald Investment and Baillie Gifford go up and down completely randomly.
Pair Corralation between Herald Investment and Baillie Gifford
Assuming the 90 days trading horizon Herald Investment Trust is expected to under-perform the Baillie Gifford. In addition to that, Herald Investment is 1.68 times more volatile than Baillie Gifford European. It trades about -0.13 of its total potential returns per unit of risk. Baillie Gifford European is currently generating about 0.38 per unit of volatility. If you would invest 8,449 in Baillie Gifford European on October 23, 2024 and sell it today you would earn a total of 521.00 from holding Baillie Gifford European or generate 6.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Herald Investment Trust vs. Baillie Gifford European
Performance |
| Timeline |
| Herald Investment Trust |
| Baillie Gifford European |
Herald Investment and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Herald Investment and Baillie Gifford
The main advantage of trading using opposite Herald Investment and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herald Investment 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.| Herald Investment vs. Catalyst Media Group | Herald Investment vs. CATLIN GROUP | Herald Investment vs. Tamburi Investment Partners | Herald Investment vs. Magnora ASA |
| Baillie Gifford vs. Herald Investment Trust | Baillie Gifford vs. Zoom Video Communications | Baillie Gifford vs. Charter Communications Cl | Baillie Gifford vs. Mineral Financial Investments |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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