Correlation Between Baillie Gifford and Msif Small

Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Msif Small 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 Msif Small 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 Msif Small Pany, you can compare the effects of market volatilities on Baillie Gifford and Msif Small 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 Msif Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Msif Small.

Diversification Opportunities for Baillie Gifford and Msif Small

0.12

Correlation Coefficient

Baillie Gifford  Msif Small

Average diversification

The 3 months correlation between Baillie and Msif is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health and Msif Small Pany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Msif Small Pany 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 Msif Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Msif Small Pany has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Msif Small go up and down completely randomly.

Pair Corralation between Baillie Gifford and Msif Small

Assuming the 90 days horizon Baillie Gifford is expected to generate 3.63 times less return on investment than Msif Small. But when comparing it to its historical volatility, Baillie Gifford Health is 1.64 times less risky than Msif Small. It trades about 0.03 of its potential returns per unit of risk. Msif Small Pany is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  562.00  in Msif Small Pany on December 7, 2024 and sell it today you would earn a total of  304.00  from holding Msif Small Pany or generate 54.09% return on investment over 90 days.

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

Baillie Gifford Health  vs.  Msif Small Pany

Baillie Gifford Health

Risk-Adjusted Performance

Very Weak

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

Msif Small Pany

Risk-Adjusted Performance

Very Weak

Over the last 90 days Msif Small Pany has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Baillie Gifford and Msif Small

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

The idea behind Baillie Gifford Health and Msif Small Pany 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.