Correlation Between Allianzgi Technology and Baillie Gifford

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

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

Diversification Opportunities for Allianzgi Technology and Baillie Gifford

0.77

Correlation Coefficient

Allianzgi Technology  Baillie Gifford

Poor diversification

The 3 months correlation between Allianzgi and Baillie is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Technology Fund and Baillie Gifford International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford Inte and Allianzgi Technology 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 Allianzgi Technology Fund 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 Inte has no effect on the direction of Allianzgi Technology i.e., Allianzgi Technology and Baillie Gifford go up and down completely randomly.

Pair Corralation between Allianzgi Technology and Baillie Gifford

Assuming the 90 days horizon Allianzgi Technology Fund is expected to generate 1.18 times more return on investment than Baillie Gifford. However, Allianzgi Technology is 1.18 times more volatile than Baillie Gifford International. It trades about 0.07 of its potential returns per unit of risk. Baillie Gifford International is currently generating about 0.03 per unit of risk. If you would invest  7,937  in Allianzgi Technology Fund on September 3, 2024 and sell it today you would earn a total of  960.00  from holding Allianzgi Technology Fund or generate 12.1% return on investment over 90 days.

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

Allianzgi Technology Fund  vs.  Baillie Gifford International

Allianzgi Technology

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Technology Fund are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Allianzgi Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Baillie Gifford Inte

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Baillie Gifford International are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward-looking signals, Baillie Gifford may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Allianzgi Technology and Baillie Gifford

The main advantage of trading using opposite Allianzgi Technology and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Technology 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 Allianzgi Technology Fund and Baillie Gifford International 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.