Correlation Between Ab Small and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Ab Small 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 Ab Small and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Small Cap and Baillie Gifford Health, you can compare the effects of market volatilities on Ab Small 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 Ab Small with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Small and Baillie Gifford.
Diversification Opportunities for Ab Small and Baillie Gifford
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between QUAZX and Baillie is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap 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 Ab Small 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 Ab Small Cap 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 Ab Small i.e., Ab Small and Baillie Gifford go up and down completely randomly.
Pair Corralation between Ab Small and Baillie Gifford
Assuming the 90 days horizon Ab Small Cap is expected to generate 0.91 times more return on investment than Baillie Gifford. However, Ab Small Cap is 1.1 times less risky than Baillie Gifford. It trades about 0.09 of its potential returns per unit of risk. Baillie Gifford Health is currently generating about -0.03 per unit of risk. If you would invest 7,349 in Ab Small Cap on October 25, 2024 and sell it today you would earn a total of 561.00 from holding Ab Small Cap or generate 7.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Small Cap vs. Baillie Gifford Health
Performance |
| Timeline |
| Ab Small Cap |
| Baillie Gifford Health |
Ab Small and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Small and Baillie Gifford
The main advantage of trading using opposite Ab Small and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Small 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.| Ab Small vs. Calvert Large Cap | Ab Small vs. Blackrock Large Cap | Ab Small vs. Americafirst Large Cap | Ab Small vs. Avantis Large Cap |
| Baillie Gifford vs. Rbc Small Cap | Baillie Gifford vs. Kinetics Small Cap | Baillie Gifford vs. Ab Small Cap | Baillie Gifford vs. Tax Managed Mid Small |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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