Correlation Between Baillie Gifford and FIRST TRUST
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and FIRST TRUST 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 FIRST TRUST 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 FIRST TRUST GLOBAL, you can compare the effects of market volatilities on Baillie Gifford and FIRST TRUST 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 FIRST TRUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and FIRST TRUST.
Diversification Opportunities for Baillie Gifford and FIRST TRUST
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Baillie and FIRST is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Growth and FIRST TRUST GLOBAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST TRUST GLOBAL 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 FIRST TRUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST TRUST GLOBAL has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and FIRST TRUST go up and down completely randomly.
Pair Corralation between Baillie Gifford and FIRST TRUST
Assuming the 90 days trading horizon Baillie Gifford Growth is expected to under-perform the FIRST TRUST. In addition to that, Baillie Gifford is 1.95 times more volatile than FIRST TRUST GLOBAL. It trades about -0.22 of its total potential returns per unit of risk. FIRST TRUST GLOBAL is currently generating about -0.04 per unit of volatility. If you would invest 165,160 in FIRST TRUST GLOBAL on October 13, 2024 and sell it today you would lose (1,260) from holding FIRST TRUST GLOBAL or give up 0.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Baillie Gifford Growth vs. FIRST TRUST GLOBAL
Performance |
| Timeline |
| Baillie Gifford Growth |
| FIRST TRUST GLOBAL |
Baillie Gifford and FIRST TRUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and FIRST TRUST
The main advantage of trading using opposite Baillie Gifford and FIRST TRUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, FIRST TRUST 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 FIRST TRUST will offset losses from the drop in FIRST TRUST's long position.| Baillie Gifford vs. Scottish Mortgage Investment | Baillie Gifford vs. CT Private Equity | Baillie Gifford vs. Aberdeen New India | Baillie Gifford vs. Blackrock Energy and |
| FIRST TRUST vs. FIRST TRUST GLOBAL | FIRST TRUST vs. FIRST TRUST GLOBAL | FIRST TRUST vs. FIRST TRUST GLOBAL | FIRST TRUST vs. FIRST TRUST INDXX |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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