Correlation Between Americafirst Large and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Americafirst 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 Americafirst 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 Americafirst Large Cap and Baillie Gifford China, you can compare the effects of market volatilities on Americafirst 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 Americafirst Large with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americafirst Large and Baillie Gifford.
Diversification Opportunities for Americafirst Large and Baillie Gifford
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Americafirst and Baillie is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Americafirst Large Cap 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 Americafirst 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 Americafirst Large 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 China has no effect on the direction of Americafirst Large i.e., Americafirst Large and Baillie Gifford go up and down completely randomly.
Pair Corralation between Americafirst Large and Baillie Gifford
Assuming the 90 days horizon Americafirst Large Cap is expected to generate 0.5 times more return on investment than Baillie Gifford. However, Americafirst Large Cap is 1.98 times less risky than Baillie Gifford. It trades about 0.09 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 1,121 in Americafirst Large Cap on September 12, 2024 and sell it today you would earn a total of 327.00 from holding Americafirst Large Cap or generate 29.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Americafirst Large Cap vs. Baillie Gifford China
Performance |
| Timeline |
| Americafirst Large Cap |
| Baillie Gifford China |
Americafirst Large and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Americafirst Large and Baillie Gifford
The main advantage of trading using opposite Americafirst Large and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americafirst 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.| Americafirst Large vs. Vanguard Total Stock | Americafirst Large vs. Vanguard 500 Index | Americafirst Large vs. Vanguard Total Stock | Americafirst Large vs. Vanguard Total Stock |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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