Correlation Between NYSE Composite and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Baillie Gifford China, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Baillie Gifford.
Diversification Opportunities for NYSE Composite and Baillie Gifford
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Baillie is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Baillie Gifford China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford China and NYSE Composite 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 NYSE Composite 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 China has no effect on the direction of NYSE Composite i.e., NYSE Composite and Baillie Gifford go up and down completely randomly.
Pair Corralation between NYSE Composite and Baillie Gifford
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.46 times more return on investment than Baillie Gifford. However, NYSE Composite is 2.16 times less risky than Baillie Gifford. It trades about 0.08 of its potential returns per unit of risk. Baillie Gifford China is currently generating about -0.02 per unit of risk. If you would invest 1,551,444 in NYSE Composite on August 31, 2024 and sell it today you would earn a total of 475,760 from holding NYSE Composite or generate 30.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
NYSE Composite vs. Baillie Gifford China
Performance |
| Timeline |
NYSE Composite and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Baillie Gifford China
Pair trading matchups for Baillie Gifford
Pair Trading with NYSE Composite and Baillie Gifford
The main advantage of trading using opposite NYSE Composite and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Baillie Gifford vs. Goehring Rozencwajg Resources | Baillie Gifford vs. Fidelity Advisor Energy | Baillie Gifford vs. Franklin Natural Resources | Baillie Gifford vs. Jennison Natural Resources |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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