Correlation Between Baillie Gifford and Downing Strategic
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Downing Strategic 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 Downing Strategic 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 Downing Strategic Micro Cap, you can compare the effects of market volatilities on Baillie Gifford and Downing Strategic 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 Downing Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Downing Strategic.
Diversification Opportunities for Baillie Gifford and Downing Strategic
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baillie and Downing is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Growth and Downing Strategic Micro Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Downing Strategic Micro 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 Downing Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Downing Strategic Micro has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Downing Strategic go up and down completely randomly.
Pair Corralation between Baillie Gifford and Downing Strategic
Assuming the 90 days trading horizon Baillie Gifford Growth is expected to generate 1.04 times more return on investment than Downing Strategic. However, Baillie Gifford is 1.04 times more volatile than Downing Strategic Micro Cap. It trades about 0.43 of its potential returns per unit of risk. Downing Strategic Micro Cap is currently generating about -0.1 per unit of risk. If you would invest 22,100 in Baillie Gifford Growth on September 2, 2024 and sell it today you would earn a total of 5,000 from holding Baillie Gifford Growth or generate 22.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford Growth vs. Downing Strategic Micro Cap
Performance |
| Timeline |
| Baillie Gifford Growth |
| Downing Strategic Micro |
Baillie Gifford and Downing Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Downing Strategic
The main advantage of trading using opposite Baillie Gifford and Downing Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Downing Strategic 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 Downing Strategic will offset losses from the drop in Downing Strategic's long position.| Baillie Gifford vs. Scottish Mortgage Investment | Baillie Gifford vs. CT Private Equity | Baillie Gifford vs. Aberdeen New India |
| Downing Strategic vs. Scottish Mortgage Investment | Downing Strategic vs. CT Private Equity | Downing Strategic vs. Aberdeen New India |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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