Correlation Between Scottish Mortgage and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Scottish Mortgage 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 Scottish Mortgage and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scottish Mortgage Investment and Baillie Gifford Growth, you can compare the effects of market volatilities on Scottish Mortgage 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 Scottish Mortgage with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scottish Mortgage and Baillie Gifford.
Diversification Opportunities for Scottish Mortgage and Baillie Gifford
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Scottish and Baillie is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Scottish Mortgage Investment and Baillie Gifford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford Growth and Scottish Mortgage 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 Scottish Mortgage Investment 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 Growth has no effect on the direction of Scottish Mortgage i.e., Scottish Mortgage and Baillie Gifford go up and down completely randomly.
Pair Corralation between Scottish Mortgage and Baillie Gifford
Assuming the 90 days trading horizon Scottish Mortgage is expected to generate 2.62 times less return on investment than Baillie Gifford. But when comparing it to its historical volatility, Scottish Mortgage Investment is 2.0 times less risky than Baillie Gifford. It trades about 0.37 of its potential returns per unit of risk. Baillie Gifford Growth is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest 21,550 in Baillie Gifford Growth on August 30, 2024 and sell it today you would earn a total of 5,650 from holding Baillie Gifford Growth or generate 26.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scottish Mortgage Investment vs. Baillie Gifford Growth
Performance |
| Timeline |
| Scottish Mortgage |
| Baillie Gifford Growth |
Scottish Mortgage and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scottish Mortgage and Baillie Gifford
The main advantage of trading using opposite Scottish Mortgage and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scottish Mortgage 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.| Scottish Mortgage vs. iShares MSCI Japan | Scottish Mortgage vs. Amundi EUR High | Scottish Mortgage vs. iShares JP Morgan | Scottish Mortgage vs. Xtrackers MSCI |
| Baillie Gifford vs. Scottish Mortgage Investment | Baillie Gifford vs. CT Private Equity | Baillie Gifford vs. Aberdeen New India | Baillie Gifford vs. Blackrock Energy and |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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