Correlation Between Live Oak and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Live Oak 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 Live Oak and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Oak Health and Baillie Gifford Health, you can compare the effects of market volatilities on Live Oak 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 Live Oak with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Baillie Gifford.
Diversification Opportunities for Live Oak and Baillie Gifford
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Live and Baillie is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health 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 Live Oak 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 Live Oak 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 Health has no effect on the direction of Live Oak i.e., Live Oak and Baillie Gifford go up and down completely randomly.
Pair Corralation between Live Oak and Baillie Gifford
Assuming the 90 days horizon Live Oak Health is expected to generate 0.66 times more return on investment than Baillie Gifford. However, Live Oak Health is 1.52 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 -0.03 per unit of risk. If you would invest 2,073 in Live Oak Health on August 24, 2024 and sell it today you would earn a total of 113.00 from holding Live Oak Health or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Oak Health vs. Baillie Gifford Health
Performance |
| Timeline |
| Live Oak Health |
| Baillie Gifford Health |
Live Oak and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Baillie Gifford
The main advantage of trading using opposite Live Oak and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak 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.| Live Oak vs. Black Oak Emerging | Live Oak vs. Pin Oak Equity | Live Oak vs. Red Oak Technology | Live Oak vs. White Oak Select |
| Baillie Gifford vs. Mutual Of America | Baillie Gifford vs. Palm Valley Capital | Baillie Gifford vs. Boston Partners Small | Baillie Gifford vs. Mid Cap Value Profund |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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