Correlation Between Baillie Gifford and Leverage Shares
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Leverage Shares 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 Leverage Shares 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 Leverage Shares 3x, you can compare the effects of market volatilities on Baillie Gifford and Leverage Shares 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 Leverage Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Leverage Shares.
Diversification Opportunities for Baillie Gifford and Leverage Shares
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Baillie and Leverage is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Growth and Leverage Shares 3x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leverage Shares 3x 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 Leverage Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leverage Shares 3x has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Leverage Shares go up and down completely randomly.
Pair Corralation between Baillie Gifford and Leverage Shares
Assuming the 90 days trading horizon Baillie Gifford is expected to generate 10.49 times less return on investment than Leverage Shares. But when comparing it to its historical volatility, Baillie Gifford Growth is 51.48 times less risky than Leverage Shares. It trades about 0.16 of its potential returns per unit of risk. Leverage Shares 3x is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 132,799 in Leverage Shares 3x on September 4, 2024 and sell it today you would lose (132,662) from holding Leverage Shares 3x or give up 99.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Growth vs. Leverage Shares 3x
Performance |
| Timeline |
| Baillie Gifford Growth |
| Leverage Shares 3x |
Baillie Gifford and Leverage Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Leverage Shares
The main advantage of trading using opposite Baillie Gifford and Leverage Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Leverage Shares 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 Leverage Shares will offset losses from the drop in Leverage Shares' long position.| Baillie Gifford vs. Scottish Mortgage Investment | Baillie Gifford vs. Blackrock Energy and | Baillie Gifford vs. Downing Strategic Micro Cap |
| Leverage Shares vs. Scottish Mortgage Investment | Leverage Shares vs. VinaCapital Vietnam Opportunity | Leverage Shares vs. Edinburgh Worldwide Investment | Leverage Shares vs. Baillie Gifford Growth |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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