Correlation Between Dunham Large and Baillie Gifford

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

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

Diversification Opportunities for Dunham Large and Baillie Gifford

0.0

Correlation Coefficient

Dunham Large  Baillie Gifford

Pay attention - limited upside

The 3 months correlation between Dunham and Baillie is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Large Cap and Baillie Gifford China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford China and Dunham Large 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 Dunham Large Cap 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 China has no effect on the direction of Dunham Large i.e., Dunham Large and Baillie Gifford go up and down completely randomly.

Pair Corralation between Dunham Large and Baillie Gifford

If you would invest  1,842  in Dunham Large Cap on December 4, 2024 and sell it today you would earn a total of  122.00  from holding Dunham Large Cap or generate 6.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Dunham Large Cap  vs.  Baillie Gifford China

Dunham Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dunham Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Baillie Gifford China

Risk-Adjusted Performance

Very Weak

Over the last 90 days Baillie Gifford China has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking signals, 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 Dunham Large and Baillie Gifford

The main advantage of trading using opposite Dunham Large and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Large 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 Dunham Large Cap and Baillie Gifford China 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.