Correlation Between Baillie Gifford and James Balanced:

Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and James Balanced: 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 Baillie Gifford and James Balanced: into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Baillie Gifford Eafe and James Balanced Golden, you can compare the effects of market volatilities on Baillie Gifford and James Balanced: 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 Baillie Gifford with a short position of James Balanced:. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and James Balanced:.

Diversification Opportunities for Baillie Gifford and James Balanced:

0.15

Correlation Coefficient

Baillie Gifford  James Balanced:

Average diversification

The 3 months correlation between Baillie and James is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Eafe and James Balanced Golden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James Balanced Golden and Baillie Gifford 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 Baillie Gifford Eafe are associated (or correlated) with James Balanced:. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of James Balanced Golden has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and James Balanced: go up and down completely randomly.

Pair Corralation between Baillie Gifford and James Balanced:

Assuming the 90 days horizon Baillie Gifford Eafe is expected to generate 1.91 times more return on investment than James Balanced:. However, Baillie Gifford is 1.91 times more volatile than James Balanced Golden. It trades about 0.08 of its potential returns per unit of risk. James Balanced Golden is currently generating about -0.02 per unit of risk. If you would invest  1,406  in Baillie Gifford Eafe on December 28, 2024 and sell it today you would earn a total of  66.00  from holding Baillie Gifford Eafe or generate 4.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Baillie Gifford Eafe  vs.  James Balanced Golden

Baillie Gifford Eafe

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Baillie Gifford Eafe are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Baillie Gifford is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

James Balanced Golden

Risk-Adjusted Performance

Very Weak

Over the last 90 days James Balanced Golden has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, James Balanced: is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Baillie Gifford and James Balanced:

The main advantage of trading using opposite Baillie Gifford and James Balanced: positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, James Balanced: 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 James Balanced: will offset losses from the drop in James Balanced:'s long position.

The idea behind Baillie Gifford Eafe and James Balanced Golden pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.