Correlation Between Pace Large and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Pace Large 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 Large 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 Large Growth and Baillie Gifford China, you can compare the effects of market volatilities on Pace Large 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 Large with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Large and Baillie Gifford.
Diversification Opportunities for Pace Large and Baillie Gifford
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pace and Baillie is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Pace Large Growth 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 Pace Large 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 Large Growth 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 Pace Large i.e., Pace Large and Baillie Gifford go up and down completely randomly.
Pair Corralation between Pace Large and Baillie Gifford
Assuming the 90 days horizon Pace Large Growth is expected to generate 0.79 times more return on investment than Baillie Gifford. However, Pace Large Growth is 1.26 times less risky than Baillie Gifford. It trades about 0.03 of its potential returns per unit of risk. Baillie Gifford China is currently generating about 0.01 per unit of risk. If you would invest 1,135 in Pace Large Growth on January 11, 2025 and sell it today you would earn a total of 221.00 from holding Pace Large Growth or generate 19.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace Large Growth vs. Baillie Gifford China
Performance |
| Timeline |
| Pace Large Growth |
| Baillie Gifford China |
Pace Large and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Large and Baillie Gifford
The main advantage of trading using opposite Pace Large and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Large 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 Large vs. Franklin Government Money | Pace Large vs. Calvert Bond Portfolio | Pace Large vs. Morningstar Defensive Bond | Pace Large vs. Intermediate Term Bond Fund |
| Baillie Gifford vs. Ab Bond Inflation | Baillie Gifford vs. Morningstar Defensive Bond | Baillie Gifford vs. Old Westbury Fixed | Baillie Gifford vs. Rbc Ultra Short Fixed |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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