Correlation Between Energy Services and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Energy Services 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 Energy Services and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Services Fund and Baillie Gifford International, you can compare the effects of market volatilities on Energy Services 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 Energy Services with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Services and Baillie Gifford.
Diversification Opportunities for Energy Services and Baillie Gifford
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Energy and Baillie is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Energy Services Fund 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 Energy Services 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 Energy Services Fund 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 Energy Services i.e., Energy Services and Baillie Gifford go up and down completely randomly.
Pair Corralation between Energy Services and Baillie Gifford
Assuming the 90 days horizon Energy Services is expected to generate 4.07 times less return on investment than Baillie Gifford. In addition to that, Energy Services is 1.26 times more volatile than Baillie Gifford International. It trades about 0.02 of its total potential returns per unit of risk. Baillie Gifford International is currently generating about 0.09 per unit of volatility. If you would invest 618.00 in Baillie Gifford International on November 9, 2024 and sell it today you would earn a total of 219.00 from holding Baillie Gifford International or generate 35.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Services Fund vs. Baillie Gifford International
Performance |
| Timeline |
| Energy Services |
| Baillie Gifford Inte |
Energy Services and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Services and Baillie Gifford
The main advantage of trading using opposite Energy Services and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Services 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.| Energy Services vs. Energy Fund Investor | Energy Services vs. Basic Materials Fund | Energy Services vs. Electronics Fund Investor | Energy Services vs. Health Care Fund |
| Baillie Gifford vs. Oppenheimer Global Allocation | Baillie Gifford vs. Us Large Pany | Baillie Gifford vs. T Rowe Price | Baillie Gifford vs. Dodge Cox Stock |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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