Correlation Between Baillie Gifford and Lsv Emerging
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Lsv Emerging 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 Lsv Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baillie Gifford Health and Lsv Emerging Markets, you can compare the effects of market volatilities on Baillie Gifford and Lsv Emerging 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 Lsv Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Lsv Emerging.
Diversification Opportunities for Baillie Gifford and Lsv Emerging
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Baillie and Lsv is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Lsv Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lsv Emerging Markets 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 Health are associated (or correlated) with Lsv Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lsv Emerging Markets has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Lsv Emerging go up and down completely randomly.
Pair Corralation between Baillie Gifford and Lsv Emerging
Assuming the 90 days horizon Baillie Gifford Health is expected to under-perform the Lsv Emerging. In addition to that, Baillie Gifford is 1.93 times more volatile than Lsv Emerging Markets. It trades about -0.04 of its total potential returns per unit of risk. Lsv Emerging Markets is currently generating about 0.03 per unit of volatility. If you would invest 1,206 in Lsv Emerging Markets on September 14, 2024 and sell it today you would earn a total of 16.00 from holding Lsv Emerging Markets or generate 1.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Baillie Gifford Health vs. Lsv Emerging Markets
Performance |
Timeline |
Baillie Gifford Health |
Lsv Emerging Markets |
Baillie Gifford and Lsv Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Baillie Gifford and Lsv Emerging
The main advantage of trading using opposite Baillie Gifford and Lsv Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Lsv Emerging 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 Lsv Emerging will offset losses from the drop in Lsv Emerging's long position.Baillie Gifford vs. Ab Select Equity | Baillie Gifford vs. Ab Fixed Income Shares | Baillie Gifford vs. Cutler Equity | Baillie Gifford vs. Us Strategic Equity |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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