Correlation Between Jennison Natural and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Jennison Natural 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 Jennison Natural and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jennison Natural Resources and Baillie Gifford Health, you can compare the effects of market volatilities on Jennison Natural 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 Jennison Natural with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jennison Natural and Baillie Gifford.
Diversification Opportunities for Jennison Natural and Baillie Gifford
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jennison and Baillie is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Jennison Natural Resources 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 Jennison Natural 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 Jennison Natural Resources 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 Jennison Natural i.e., Jennison Natural and Baillie Gifford go up and down completely randomly.
Pair Corralation between Jennison Natural and Baillie Gifford
Assuming the 90 days horizon Jennison Natural Resources is expected to generate 0.9 times more return on investment than Baillie Gifford. However, Jennison Natural Resources is 1.11 times less risky than Baillie Gifford. It trades about 0.03 of its potential returns per unit of risk. Baillie Gifford Health is currently generating about -0.1 per unit of risk. If you would invest 4,193 in Jennison Natural Resources on August 29, 2024 and sell it today you would earn a total of 38.00 from holding Jennison Natural Resources or generate 0.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jennison Natural Resources vs. Baillie Gifford Health
Performance |
| Timeline |
| Jennison Natural Res |
| Baillie Gifford Health |
Jennison Natural and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jennison Natural and Baillie Gifford
The main advantage of trading using opposite Jennison Natural and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jennison Natural 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.The idea behind Jennison Natural Resources and Baillie Gifford Health pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Baillie Gifford vs. Fidelity Advisor Technology | Baillie Gifford vs. Fidelity Advisor Biotechnology | Baillie Gifford vs. Fidelity Advisor Financial | Baillie Gifford vs. Fidelity Advisor Utilities |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |