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
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Baillie and FIRST is 0.96. 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 is expected to generate 73.69 times less return on investment than FIRST TRUST. But when comparing it to its historical volatility, Baillie Gifford Growth is 98.33 times less risky than FIRST TRUST. It trades about 0.16 of its potential returns per unit of risk. FIRST TRUST GLOBAL is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,187 in FIRST TRUST GLOBAL on September 20, 2024 and sell it today you would earn a total of 244,563 from holding FIRST TRUST GLOBAL or generate 11182.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.6% |
| 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. Aberdeen New India | Baillie Gifford vs. Downing Strategic Micro Cap | Baillie Gifford vs. CT Private Equity | Baillie Gifford vs. Blackrock Energy and |
| FIRST TRUST vs. Edinburgh Worldwide Investment | FIRST TRUST vs. BlackRock Latin American | FIRST TRUST vs. Coor Service Management | FIRST TRUST vs. Franklin FTSE Brazil |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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