Correlation Between Multisector Bond and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Multisector Bond 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 Multisector Bond and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multisector Bond Sma and Baillie Gifford International, you can compare the effects of market volatilities on Multisector Bond 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 Multisector Bond with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multisector Bond and Baillie Gifford.
Diversification Opportunities for Multisector Bond and Baillie Gifford
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Multisector and Baillie is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Multisector Bond Sma and Baillie Gifford International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford Inte and Multisector Bond 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 Multisector Bond Sma 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 Inte has no effect on the direction of Multisector Bond i.e., Multisector Bond and Baillie Gifford go up and down completely randomly.
Pair Corralation between Multisector Bond and Baillie Gifford
Assuming the 90 days horizon Multisector Bond is expected to generate 1.93 times less return on investment than Baillie Gifford. But when comparing it to its historical volatility, Multisector Bond Sma is 5.74 times less risky than Baillie Gifford. It trades about 0.35 of its potential returns per unit of risk. Baillie Gifford International is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,416 in Baillie Gifford International on September 13, 2024 and sell it today you would earn a total of 35.00 from holding Baillie Gifford International or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multisector Bond Sma vs. Baillie Gifford International
Performance |
| Timeline |
| Multisector Bond Sma |
| Baillie Gifford Inte |
Multisector Bond and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multisector Bond and Baillie Gifford
The main advantage of trading using opposite Multisector Bond and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multisector Bond 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.| Multisector Bond vs. Vanguard Information Technology | Multisector Bond vs. Hennessy Technology Fund | Multisector Bond vs. Janus Global Technology | Multisector Bond vs. Icon Information Technology |
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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 Stocks Directory module to find actively traded stocks across global markets.
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