Correlation Between Baillie Gifford and Dreyfus Short
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Dreyfus Short 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 Dreyfus Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baillie Gifford Emerging and Dreyfus Short Intermediate, you can compare the effects of market volatilities on Baillie Gifford and Dreyfus Short 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 Dreyfus Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Dreyfus Short.
Diversification Opportunities for Baillie Gifford and Dreyfus Short
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baillie and Dreyfus is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Emerging and Dreyfus Short Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Short Interm 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 Emerging are associated (or correlated) with Dreyfus Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Short Interm has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Dreyfus Short go up and down completely randomly.
Pair Corralation between Baillie Gifford and Dreyfus Short
Assuming the 90 days horizon Baillie Gifford Emerging is expected to generate 11.19 times more return on investment than Dreyfus Short. However, Baillie Gifford is 11.19 times more volatile than Dreyfus Short Intermediate. It trades about 0.01 of its potential returns per unit of risk. Dreyfus Short Intermediate is currently generating about 0.12 per unit of risk. If you would invest 1,973 in Baillie Gifford Emerging on December 3, 2024 and sell it today you would earn a total of 10.00 from holding Baillie Gifford Emerging or generate 0.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Baillie Gifford Emerging vs. Dreyfus Short Intermediate
Performance |
Timeline |
Baillie Gifford Emerging |
Dreyfus Short Interm |
Baillie Gifford and Dreyfus Short Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Baillie Gifford and Dreyfus Short
The main advantage of trading using opposite Baillie Gifford and Dreyfus Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Dreyfus Short 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 Dreyfus Short will offset losses from the drop in Dreyfus Short's long position.Baillie Gifford vs. Artisan Developing World | Baillie Gifford vs. Jpmorgan Emerging Markets | Baillie Gifford vs. Doubleline Emerging Markets | Baillie Gifford vs. Hartford Schroders Emerging |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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