Correlation Between Baillie Gifford and ISHARES III
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and ISHARES III 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 Baillie Gifford and ISHARES III into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baillie Gifford Growth and ISHARES III PLC, you can compare the effects of market volatilities on Baillie Gifford and ISHARES III 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 Baillie Gifford with a short position of ISHARES III. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and ISHARES III.
Diversification Opportunities for Baillie Gifford and ISHARES III
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Baillie and ISHARES is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Growth and ISHARES III PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ISHARES III PLC and Baillie Gifford 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 Baillie Gifford Growth are associated (or correlated) with ISHARES III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ISHARES III PLC has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and ISHARES III go up and down completely randomly.
Pair Corralation between Baillie Gifford and ISHARES III
Assuming the 90 days trading horizon Baillie Gifford is expected to generate 23.39 times less return on investment than ISHARES III. But when comparing it to its historical volatility, Baillie Gifford Growth is 51.21 times less risky than ISHARES III. It trades about 0.15 of its potential returns per unit of risk. ISHARES III PLC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 691.00 in ISHARES III PLC on September 13, 2024 and sell it today you would earn a total of 116,289 from holding ISHARES III PLC or generate 16829.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 93.6% |
| Values | Daily Returns |
Baillie Gifford Growth vs. ISHARES III PLC
Performance |
| Timeline |
| Baillie Gifford Growth |
| ISHARES III PLC |
Baillie Gifford and ISHARES III Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and ISHARES III
The main advantage of trading using opposite Baillie Gifford and ISHARES III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, ISHARES III 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 ISHARES III will offset losses from the drop in ISHARES III's long position.| Baillie Gifford vs. Scottish Mortgage Investment | Baillie Gifford vs. CT Private Equity | Baillie Gifford vs. Aberdeen New India | Baillie Gifford vs. Blackrock Energy and |
| ISHARES III vs. ISHARES V PLC | ISHARES III vs. ISHARES IV PLC | ISHARES III vs. ISHARES V PLC | ISHARES III vs. ISHARES IV PLC |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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