Correlation Between Vanguard Value and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Vanguard Value 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 Vanguard Value and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Value Index and Baillie Gifford Health, you can compare the effects of market volatilities on Vanguard Value 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 Vanguard Value with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Value and Baillie Gifford.
Diversification Opportunities for Vanguard Value and Baillie Gifford
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VANGUARD and Baillie is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Value Index and Baillie Gifford Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford Health and Vanguard Value 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 Vanguard Value Index 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 Health has no effect on the direction of Vanguard Value i.e., Vanguard Value and Baillie Gifford go up and down completely randomly.
Pair Corralation between Vanguard Value and Baillie Gifford
Assuming the 90 days horizon Vanguard Value Index is expected to generate 0.52 times more return on investment than Baillie Gifford. However, Vanguard Value Index is 1.94 times less risky than Baillie Gifford. It trades about 0.16 of its potential returns per unit of risk. Baillie Gifford Health is currently generating about 0.03 per unit of risk. If you would invest 5,475 in Vanguard Value Index on September 2, 2024 and sell it today you would earn a total of 1,615 from holding Vanguard Value Index or generate 29.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Value Index vs. Baillie Gifford Health
Performance |
| Timeline |
| Vanguard Value Index |
| Baillie Gifford Health |
Vanguard Value and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Value and Baillie Gifford
The main advantage of trading using opposite Vanguard Value and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Value 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.| Vanguard Value vs. Baillie Gifford Health | Vanguard Value vs. Lord Abbett Health | Vanguard Value vs. Alphacentric Lifesci Healthcare | Vanguard Value vs. Invesco Global Health |
| Baillie Gifford vs. The Eafe Pure | Baillie Gifford vs. The Long Term | Baillie Gifford vs. Baillie Gifford International | Baillie Gifford vs. Baillie Gifford International |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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