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 Health and Baillie Gifford Eafe, 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
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lord and Baillie is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Health 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 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 Health 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 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 Health is expected to generate 1.44 times more return on investment than Baillie Gifford. However, Lord Abbett is 1.44 times more volatile than Baillie Gifford Eafe. It trades about 0.12 of its potential returns per unit of risk. Baillie Gifford Eafe is currently generating about 0.05 per unit of risk. If you would invest 1,923 in Lord Abbett Health on August 31, 2024 and sell it today you would earn a total of 57.00 from holding Lord Abbett Health or generate 2.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett Health vs. Baillie Gifford Eafe
Performance |
| Timeline |
| Lord Abbett Health |
| Baillie Gifford Eafe |
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. Vy T Rowe | Lord Abbett vs. Eaton Vance Atlanta | Lord Abbett vs. Blackrock Health Sciences | Lord Abbett vs. Blackrock Health Sciences |
| Baillie Gifford vs. Prudential Health Sciences | Baillie Gifford vs. Health Care Fund | Baillie Gifford vs. Lord Abbett Health | Baillie Gifford vs. Delaware Healthcare Fund |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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