Correlation Between Columbia Total and Baillie Gifford

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

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

Diversification Opportunities for Columbia Total and Baillie Gifford

0.32

Correlation Coefficient

Columbia Total  Baillie Gifford

Weak diversification

The 3 months correlation between Columbia and Baillie is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Total Return and Baillie Gifford Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford Health and Columbia Total 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 Columbia Total Return are associated (or correlated) with Baillie Gifford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baillie Gifford Health has no effect on the direction of Columbia Total i.e., Columbia Total and Baillie Gifford go up and down completely randomly.

Pair Corralation between Columbia Total and Baillie Gifford

If you would invest  2,056  in Columbia Total Return on October 24, 2024 and sell it today you would earn a total of  7.00  from holding Columbia Total Return or generate 0.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.74%
Values	Daily Returns

Columbia Total Return  vs.  Baillie Gifford Health

Columbia Total Return

Risk-Adjusted Performance

0 of 100

Very Weak

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

Baillie Gifford Health

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with Columbia Total and Baillie Gifford

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

The idea behind Columbia Total Return and Baillie Gifford Health 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.