Correlation Between Gabelli Convertible and Baillie Gifford

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

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

Diversification Opportunities for Gabelli Convertible and Baillie Gifford

0.29

Correlation Coefficient

Gabelli Convertible  Baillie Gifford

Modest diversification

The 3 months correlation between Gabelli and Baillie is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Convertible And 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 Gabelli Convertible 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 Gabelli Convertible And 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 Gabelli Convertible i.e., Gabelli Convertible and Baillie Gifford go up and down completely randomly.

Pair Corralation between Gabelli Convertible and Baillie Gifford

Considering the 90-day investment horizon Gabelli Convertible is expected to generate 3.9 times less return on investment than Baillie Gifford. But when comparing it to its historical volatility, Gabelli Convertible And is 1.45 times less risky than Baillie Gifford. It trades about 0.07 of its potential returns per unit of risk. Baillie Gifford China is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  515.00  in Baillie Gifford China on December 28, 2024 and sell it today you would earn a total of  93.00  from holding Baillie Gifford China or generate 18.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Gabelli Convertible And  vs.  Baillie Gifford China

Gabelli Convertible And

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Convertible And are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable fundamental indicators, Gabelli Convertible is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Baillie Gifford China

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Baillie Gifford China are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Baillie Gifford showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gabelli Convertible and Baillie Gifford

The main advantage of trading using opposite Gabelli Convertible and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Convertible 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 Gabelli Convertible And 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.