Correlation Between Western Asset and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Inflation and Baillie Gifford Eafe, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Baillie Gifford.
Diversification Opportunities for Western Asset and Baillie Gifford
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Baillie is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Inflation 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 Western Asset 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 Western Asset Inflation 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 Western Asset i.e., Western Asset and Baillie Gifford go up and down completely randomly.
Pair Corralation between Western Asset and Baillie Gifford
Assuming the 90 days horizon Western Asset is expected to generate 5.93 times less return on investment than Baillie Gifford. But when comparing it to its historical volatility, Western Asset Inflation is 2.93 times less risky than Baillie Gifford. It trades about 0.02 of its potential returns per unit of risk. Baillie Gifford Eafe is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,120 in Baillie Gifford Eafe on September 5, 2024 and sell it today you would earn a total of 251.00 from holding Baillie Gifford Eafe or generate 22.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Inflation vs. Baillie Gifford Eafe
Performance |
| Timeline |
| Western Asset Inflation |
| Baillie Gifford Eafe |
Western Asset and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Baillie Gifford
The main advantage of trading using opposite Western Asset and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. Multisector Bond Sma | Western Asset vs. T Rowe Price | Western Asset vs. Legg Mason Partners | Western Asset vs. Bbh Intermediate Municipal |
| Baillie Gifford vs. Inflation Protected Bond Fund | Baillie Gifford vs. Western Asset Inflation | Baillie Gifford vs. Fidelity Sai Inflationfocused | Baillie Gifford vs. Ab Bond Inflation |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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