Correlation Between Baillie Gifford and BlackRock Latin
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and BlackRock Latin 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 BlackRock Latin 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 BlackRock Latin American, you can compare the effects of market volatilities on Baillie Gifford and BlackRock Latin 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 BlackRock Latin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and BlackRock Latin.
Diversification Opportunities for Baillie Gifford and BlackRock Latin
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Baillie and BlackRock is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Growth and BlackRock Latin American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Latin American 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 BlackRock Latin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Latin American has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and BlackRock Latin go up and down completely randomly.
Pair Corralation between Baillie Gifford and BlackRock Latin
Assuming the 90 days trading horizon Baillie Gifford Growth is expected to generate 1.62 times more return on investment than BlackRock Latin. However, Baillie Gifford is 1.62 times more volatile than BlackRock Latin American. It trades about 0.47 of its potential returns per unit of risk. BlackRock Latin American is currently generating about -0.22 per unit of risk. If you would invest 21,700 in Baillie Gifford Growth on September 1, 2024 and sell it today you would earn a total of 5,400 from holding Baillie Gifford Growth or generate 24.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Growth vs. BlackRock Latin American
Performance |
| Timeline |
| Baillie Gifford Growth |
| BlackRock Latin American |
Baillie Gifford and BlackRock Latin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and BlackRock Latin
The main advantage of trading using opposite Baillie Gifford and BlackRock Latin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, BlackRock Latin 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 BlackRock Latin will offset losses from the drop in BlackRock Latin's long position.| Baillie Gifford vs. Scottish Mortgage Investment | Baillie Gifford vs. CT Private Equity | Baillie Gifford vs. Aberdeen New India |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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