Correlation Between Baillie Gifford and HSBC MSCI
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and HSBC MSCI 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 HSBC MSCI 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 HSBC MSCI Emerging, you can compare the effects of market volatilities on Baillie Gifford and HSBC MSCI 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 HSBC MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and HSBC MSCI.
Diversification Opportunities for Baillie Gifford and HSBC MSCI
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Baillie and HSBC is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Growth and HSBC MSCI Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC MSCI Emerging 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 HSBC MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC MSCI Emerging has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and HSBC MSCI go up and down completely randomly.
Pair Corralation between Baillie Gifford and HSBC MSCI
Assuming the 90 days trading horizon Baillie Gifford Growth is expected to generate 1.48 times more return on investment than HSBC MSCI. However, Baillie Gifford is 1.48 times more volatile than HSBC MSCI Emerging. It trades about 0.09 of its potential returns per unit of risk. HSBC MSCI Emerging is currently generating about 0.05 per unit of risk. If you would invest 14,960 in Baillie Gifford Growth on November 19, 2024 and sell it today you would earn a total of 11,640 from holding Baillie Gifford Growth or generate 77.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Baillie Gifford Growth vs. HSBC MSCI Emerging
Performance |
| Timeline |
| Baillie Gifford Growth |
| HSBC MSCI Emerging |
Baillie Gifford and HSBC MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and HSBC MSCI
The main advantage of trading using opposite Baillie Gifford and HSBC MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, HSBC MSCI 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 HSBC MSCI will offset losses from the drop in HSBC MSCI's long position.| Baillie Gifford vs. Aberdeen New India | Baillie Gifford vs. Downing Strategic Micro Cap | Baillie Gifford vs. CT Private Equity | Baillie Gifford vs. Blackrock Energy and |
| HSBC MSCI vs. HSBC FTSE EPRA | HSBC MSCI vs. HSBC SP 500 | HSBC MSCI vs. HSBC NASDAQ Global | HSBC MSCI vs. HSBC MSCI USA |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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