Correlation Between Pace Municipal and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Pace Municipal 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 Municipal 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 Municipal Fixed and Baillie Gifford International, you can compare the effects of market volatilities on Pace Municipal 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 Municipal with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Municipal and Baillie Gifford.
Diversification Opportunities for Pace Municipal and Baillie Gifford
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pace and Baillie is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Pace Municipal Fixed 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 Pace Municipal 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 Municipal Fixed 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 Pace Municipal i.e., Pace Municipal and Baillie Gifford go up and down completely randomly.
Pair Corralation between Pace Municipal and Baillie Gifford
Assuming the 90 days horizon Pace Municipal is expected to generate 4.02 times less return on investment than Baillie Gifford. But when comparing it to its historical volatility, Pace Municipal Fixed is 5.35 times less risky than Baillie Gifford. It trades about 0.08 of its potential returns per unit of risk. Baillie Gifford International is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,128 in Baillie Gifford International on September 12, 2024 and sell it today you would earn a total of 347.00 from holding Baillie Gifford International or generate 30.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace Municipal Fixed vs. Baillie Gifford International
Performance |
| Timeline |
| Pace Municipal Fixed |
| Baillie Gifford Inte |
Pace Municipal and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Municipal and Baillie Gifford
The main advantage of trading using opposite Pace Municipal and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Municipal 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 Municipal vs. Scharf Global Opportunity | Pace Municipal vs. Ab Value Fund | Pace Municipal vs. Arrow Managed Futures | Pace Municipal vs. Materials Portfolio Fidelity |
| Baillie Gifford vs. Pace Municipal Fixed | Baillie Gifford vs. Nuveen Minnesota Municipal | Baillie Gifford vs. California High Yield Municipal | Baillie Gifford vs. Transamerica Intermediate Muni |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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