Correlation Between Western Assets and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Western Assets 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 Assets 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 Assets Emerging and Baillie Gifford Discovery, you can compare the effects of market volatilities on Western Assets 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 Assets with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Assets and Baillie Gifford.
Diversification Opportunities for Western Assets and Baillie Gifford
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and Baillie is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Western Assets Emerging and Baillie Gifford Discovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford Discovery and Western Assets 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 Assets Emerging 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 Discovery has no effect on the direction of Western Assets i.e., Western Assets and Baillie Gifford go up and down completely randomly.
Pair Corralation between Western Assets and Baillie Gifford
Assuming the 90 days horizon Western Assets Emerging is expected to under-perform the Baillie Gifford. But the mutual fund apears to be less risky and, when comparing its historical volatility, Western Assets Emerging is 5.96 times less risky than Baillie Gifford. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Baillie Gifford Discovery is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 543.00 in Baillie Gifford Discovery on September 5, 2024 and sell it today you would earn a total of 67.00 from holding Baillie Gifford Discovery or generate 12.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Assets Emerging vs. Baillie Gifford Discovery
Performance |
| Timeline |
| Western Assets Emerging |
| Baillie Gifford Discovery |
Western Assets and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Assets and Baillie Gifford
The main advantage of trading using opposite Western Assets and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Assets 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 Assets vs. Amg Managers Centersquare | Western Assets vs. Franklin Real Estate | Western Assets vs. Franklin Real Estate | Western Assets vs. Columbia Real Estate |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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