Correlation Between Baillie Gifford and IShares VII
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and IShares VII 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 VII 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 VII PLC, you can compare the effects of market volatilities on Baillie Gifford and IShares VII 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 VII. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and IShares VII.
Diversification Opportunities for Baillie Gifford and IShares VII
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Baillie and IShares is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Growth and iShares VII PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares VII 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 VII. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares VII PLC has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and IShares VII go up and down completely randomly.
Pair Corralation between Baillie Gifford and IShares VII
Assuming the 90 days trading horizon Baillie Gifford Growth is expected to generate 2.78 times more return on investment than IShares VII. However, Baillie Gifford is 2.78 times more volatile than iShares VII PLC. It trades about 0.15 of its potential returns per unit of risk. iShares VII PLC is currently generating about 0.04 per unit of risk. If you would invest 15,740 in Baillie Gifford Growth on September 3, 2024 and sell it today you would earn a total of 11,660 from holding Baillie Gifford Growth or generate 74.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.05% |
| Values | Daily Returns |
Baillie Gifford Growth vs. iShares VII PLC
Performance |
| Timeline |
| Baillie Gifford Growth |
| iShares VII PLC |
Baillie Gifford and IShares VII Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and IShares VII
The main advantage of trading using opposite Baillie Gifford and IShares VII positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, IShares VII 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 VII will offset losses from the drop in IShares VII's long position.| Baillie Gifford vs. Scottish Mortgage Investment | Baillie Gifford vs. CT Private Equity | Baillie Gifford vs. Aberdeen New India | Baillie Gifford vs. Downing Strategic Micro Cap |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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