Correlation Between Baillie Gifford and Fidelity Sustainable
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Fidelity Sustainable 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 Fidelity Sustainable 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 Fidelity Sustainable Global, you can compare the effects of market volatilities on Baillie Gifford and Fidelity Sustainable 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 Fidelity Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Fidelity Sustainable.
Diversification Opportunities for Baillie Gifford and Fidelity Sustainable
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baillie and Fidelity is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Growth and Fidelity Sustainable Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sustainable 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 Fidelity Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Sustainable has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Fidelity Sustainable go up and down completely randomly.
Pair Corralation between Baillie Gifford and Fidelity Sustainable
Assuming the 90 days trading horizon Baillie Gifford Growth is expected to generate 3.79 times more return on investment than Fidelity Sustainable. However, Baillie Gifford is 3.79 times more volatile than Fidelity Sustainable Global. It trades about 0.47 of its potential returns per unit of risk. Fidelity Sustainable Global is currently generating about -0.05 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 Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Baillie Gifford Growth vs. Fidelity Sustainable Global
Performance |
| Timeline |
| Baillie Gifford Growth |
| Fidelity Sustainable |
Baillie Gifford and Fidelity Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Fidelity Sustainable
The main advantage of trading using opposite Baillie Gifford and Fidelity Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Fidelity Sustainable 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 Fidelity Sustainable will offset losses from the drop in Fidelity Sustainable's long position.| Baillie Gifford vs. Scottish Mortgage Investment | Baillie Gifford vs. CT Private Equity | Baillie Gifford 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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