Correlation Between Pace Alternative and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Pace Alternative 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 Pace Alternative and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace Alternative Strategies and Baillie Gifford Health, you can compare the effects of market volatilities on Pace Alternative 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 Pace Alternative with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Alternative and Baillie Gifford.
Diversification Opportunities for Pace Alternative and Baillie Gifford
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PACE and Baillie is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Pace Alternative Strategies 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 Pace Alternative 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 Pace Alternative Strategies 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 Pace Alternative i.e., Pace Alternative and Baillie Gifford go up and down completely randomly.
Pair Corralation between Pace Alternative and Baillie Gifford
Assuming the 90 days horizon Pace Alternative Strategies is expected to generate 0.2 times more return on investment than Baillie Gifford. However, Pace Alternative Strategies is 4.99 times less risky than Baillie Gifford. It trades about 0.34 of its potential returns per unit of risk. Baillie Gifford Health is currently generating about -0.01 per unit of risk. If you would invest 1,122 in Pace Alternative Strategies on September 1, 2024 and sell it today you would earn a total of 25.00 from holding Pace Alternative Strategies or generate 2.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Pace Alternative Strategies vs. Baillie Gifford Health
Performance |
| Timeline |
| Pace Alternative Str |
| Baillie Gifford Health |
Pace Alternative and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Alternative and Baillie Gifford
The main advantage of trading using opposite Pace Alternative and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Alternative 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.| Pace Alternative vs. Tax Managed Large Cap | Pace Alternative vs. Dana Large Cap | Pace Alternative vs. Qs Large Cap | Pace Alternative vs. Transamerica Large Cap |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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