Correlation Between Inflation-protected and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Inflation-protected 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 Inflation-protected and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflation Protected Bond Fund and Baillie Gifford Health, you can compare the effects of market volatilities on Inflation-protected 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 Inflation-protected with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflation-protected and Baillie Gifford.
Diversification Opportunities for Inflation-protected and Baillie Gifford
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Inflation-protected and Baillie is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Inflation Protected Bond Fund 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 Inflation-protected 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 Inflation Protected Bond Fund 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 Inflation-protected i.e., Inflation-protected and Baillie Gifford go up and down completely randomly.
Pair Corralation between Inflation-protected and Baillie Gifford
Assuming the 90 days horizon Inflation Protected Bond Fund is expected to generate 0.33 times more return on investment than Baillie Gifford. However, Inflation Protected Bond Fund is 3.04 times less risky than Baillie Gifford. It trades about 0.06 of its potential returns per unit of risk. Baillie Gifford Health is currently generating about -0.02 per unit of risk. If you would invest 910.00 in Inflation Protected Bond Fund on October 31, 2024 and sell it today you would earn a total of 120.00 from holding Inflation Protected Bond Fund or generate 13.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.81% |
| Values | Daily Returns |
Inflation Protected Bond Fund vs. Baillie Gifford Health
Performance |
| Timeline |
| Inflation Protected |
| Baillie Gifford Health |
Inflation-protected and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inflation-protected and Baillie Gifford
The main advantage of trading using opposite Inflation-protected and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflation-protected 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.| Inflation-protected vs. Jhancock Diversified Macro | Inflation-protected vs. Allianzgi Diversified Income | Inflation-protected vs. Lord Abbett Diversified | Inflation-protected vs. Vy T Rowe |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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