Correlation Between Visa and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Visa and Baillie Gifford 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 Visa and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Baillie Gifford Eafe, you can compare the effects of market volatilities on Visa and Baillie Gifford 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 Visa with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Baillie Gifford.
Diversification Opportunities for Visa and Baillie Gifford
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Baillie is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Baillie Gifford Eafe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford Eafe and Visa 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 Visa Class A are associated (or correlated) with Baillie Gifford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baillie Gifford Eafe has no effect on the direction of Visa i.e., Visa and Baillie Gifford go up and down completely randomly.
Pair Corralation between Visa and Baillie Gifford
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.08 times more return on investment than Baillie Gifford. However, Visa is 1.08 times more volatile than Baillie Gifford Eafe. It trades about 0.09 of its potential returns per unit of risk. Baillie Gifford Eafe is currently generating about 0.04 per unit of risk. If you would invest 25,387 in Visa Class A on September 2, 2024 and sell it today you would earn a total of 6,121 from holding Visa Class A or generate 24.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Baillie Gifford Eafe
Performance |
| Timeline |
| Visa Class A |
| Baillie Gifford Eafe |
Visa and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Baillie Gifford
The main advantage of trading using opposite Visa and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Baillie Gifford 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 Baillie Gifford will offset losses from the drop in Baillie Gifford's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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