Correlation Between Xtrackers MSCI and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Xtrackers MSCI 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 Xtrackers MSCI and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers MSCI and Baillie Gifford Growth, you can compare the effects of market volatilities on Xtrackers MSCI 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 Xtrackers MSCI with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers MSCI and Baillie Gifford.
Diversification Opportunities for Xtrackers MSCI and Baillie Gifford
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Xtrackers and Baillie is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers MSCI and Baillie Gifford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford Growth and Xtrackers MSCI 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 Xtrackers MSCI 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 Growth has no effect on the direction of Xtrackers MSCI i.e., Xtrackers MSCI and Baillie Gifford go up and down completely randomly.
Pair Corralation between Xtrackers MSCI and Baillie Gifford
Assuming the 90 days trading horizon Xtrackers MSCI is expected to generate 0.92 times more return on investment than Baillie Gifford. However, Xtrackers MSCI is 1.08 times less risky than Baillie Gifford. It trades about 0.3 of its potential returns per unit of risk. Baillie Gifford Growth is currently generating about 0.08 per unit of risk. If you would invest 4,709 in Xtrackers MSCI on November 27, 2024 and sell it today you would earn a total of 361.00 from holding Xtrackers MSCI or generate 7.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers MSCI vs. Baillie Gifford Growth
Performance |
| Timeline |
| Xtrackers MSCI |
| Baillie Gifford Growth |
Xtrackers MSCI and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers MSCI and Baillie Gifford
The main advantage of trading using opposite Xtrackers MSCI and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers MSCI 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.| Xtrackers MSCI vs. Xtrackers FTSE 250 | Xtrackers MSCI vs. Xtrackers Ie Plc | Xtrackers MSCI vs. Xtrackers Russell 2000 | Xtrackers MSCI vs. Xtrackers USD Corporate |
| 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 |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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