Correlation Between Lord Abbett and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Lord Abbett 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 Lord Abbett and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett Convertible and Baillie Gifford Health, you can compare the effects of market volatilities on Lord Abbett 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 Lord Abbett with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Baillie Gifford.
Diversification Opportunities for Lord Abbett and Baillie Gifford
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lord and Baillie is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Convertible 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 Lord Abbett 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 Lord Abbett Convertible 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 Lord Abbett i.e., Lord Abbett and Baillie Gifford go up and down completely randomly.
Pair Corralation between Lord Abbett and Baillie Gifford
Assuming the 90 days horizon Lord Abbett Convertible is expected to generate 0.44 times more return on investment than Baillie Gifford. However, Lord Abbett Convertible is 2.27 times less risky than Baillie Gifford. It trades about 0.2 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 1,315 in Lord Abbett Convertible on September 2, 2024 and sell it today you would earn a total of 178.00 from holding Lord Abbett Convertible or generate 13.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Convertible vs. Baillie Gifford Health
Performance |
| Timeline |
| Lord Abbett Convertible |
| Baillie Gifford Health |
Lord Abbett and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Baillie Gifford
The main advantage of trading using opposite Lord Abbett and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett 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.| Lord Abbett vs. Aqr Diversified Arbitrage | Lord Abbett vs. Fidelity Advisor Diversified | Lord Abbett vs. Jhancock Diversified Macro | Lord Abbett vs. Harbor Diversified International |
| Baillie Gifford vs. Absolute Convertible Arbitrage | Baillie Gifford vs. Allianzgi Convertible Income | Baillie Gifford vs. Lord Abbett Convertible | Baillie Gifford vs. The Gamco Global |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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