Correlation Between Vaughan Nelson and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Vaughan Nelson 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 Vaughan Nelson and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vaughan Nelson Value and Baillie Gifford Health, you can compare the effects of market volatilities on Vaughan Nelson 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 Vaughan Nelson with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vaughan Nelson and Baillie Gifford.
Diversification Opportunities for Vaughan Nelson and Baillie Gifford
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vaughan and Baillie is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Vaughan Nelson Value 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 Vaughan Nelson 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 Vaughan Nelson Value 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 Vaughan Nelson i.e., Vaughan Nelson and Baillie Gifford go up and down completely randomly.
Pair Corralation between Vaughan Nelson and Baillie Gifford
Assuming the 90 days horizon Vaughan Nelson Value is expected to generate 0.95 times more return on investment than Baillie Gifford. However, Vaughan Nelson Value is 1.05 times less risky than Baillie Gifford. It trades about 0.11 of its potential returns per unit of risk. Baillie Gifford Health is currently generating about 0.0 per unit of risk. If you would invest 2,190 in Vaughan Nelson Value on September 3, 2024 and sell it today you would earn a total of 417.00 from holding Vaughan Nelson Value or generate 19.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vaughan Nelson Value vs. Baillie Gifford Health
Performance |
| Timeline |
| Vaughan Nelson Value |
| Baillie Gifford Health |
Vaughan Nelson and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vaughan Nelson and Baillie Gifford
The main advantage of trading using opposite Vaughan Nelson and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vaughan Nelson 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.| Vaughan Nelson vs. Massmutual Premier Diversified | Vaughan Nelson vs. Principal Lifetime Hybrid | Vaughan Nelson vs. Legg Mason Bw | Vaughan Nelson vs. T Rowe Price |
| Baillie Gifford vs. Legg Mason Partners | Baillie Gifford vs. T Rowe Price | Baillie Gifford vs. Black Oak Emerging | Baillie Gifford vs. Templeton Emerging Markets |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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