Correlation Between Baillie Gifford and Us Equity

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Can any of the company-specific risk be diversified away by investing in both Baillie Gifford and Us Equity 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 Us Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baillie Gifford International and The Equity Growth, you can compare the effects of market volatilities on Baillie Gifford and Us Equity 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 Us Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Us Equity.

Diversification Opportunities for Baillie Gifford and Us Equity

BAILLIEBGGSXDiversified AwayBAILLIEBGGSXDiversified Away100%
0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between BAILLIE and BGGSX is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford International and The Equity Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Growth 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 International are associated (or correlated) with Us Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Growth has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Us Equity go up and down completely randomly.

Pair Corralation between Baillie Gifford and Us Equity

Assuming the 90 days horizon Baillie Gifford International is expected to generate 0.67 times more return on investment than Us Equity. However, Baillie Gifford International is 1.5 times less risky than Us Equity. It trades about 0.15 of its potential returns per unit of risk. The Equity Growth is currently generating about 0.09 per unit of risk. If you would invest  782.00  in Baillie Gifford International on November 22, 2024 and sell it today you would earn a total of  97.00  from holding Baillie Gifford International or generate 12.4% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Baillie Gifford International  vs.  The Equity Growth

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -50510
JavaScript chart by amCharts 3.21.15BTLSX BGGSX
       Timeline  
Baillie Gifford Inte 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Baillie Gifford International are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Baillie Gifford showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb7.67.888.28.48.68.8
Equity Growth 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in The Equity Growth are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Us Equity may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2626.52727.52828.52929.530

Baillie Gifford and Us Equity Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.23-3.17-2.11-1.040.01771.142.283.414.55 0.050.100.150.20
JavaScript chart by amCharts 3.21.15BTLSX BGGSX
       Returns  

Pair Trading with Baillie Gifford and Us Equity

The main advantage of trading using opposite Baillie Gifford and Us Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Us Equity 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 Us Equity will offset losses from the drop in Us Equity's long position.
The idea behind Baillie Gifford International and The Equity Growth 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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