Correlation Between Huber Capital and Baillie Gifford

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

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

Diversification Opportunities for Huber Capital and Baillie Gifford

0.25

Correlation Coefficient

Huber Capital  Baillie Gifford

Modest diversification

The 3 months correlation between Huber and Baillie is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Huber Capital Equity and Baillie Gifford Eafe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford Eafe and Huber Capital 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 Huber Capital Equity 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 Eafe has no effect on the direction of Huber Capital i.e., Huber Capital and Baillie Gifford go up and down completely randomly.

Pair Corralation between Huber Capital and Baillie Gifford

Assuming the 90 days horizon Huber Capital Equity is expected to generate 0.67 times more return on investment than Baillie Gifford. However, Huber Capital Equity is 1.5 times less risky than Baillie Gifford. It trades about 0.13 of its potential returns per unit of risk. Baillie Gifford Eafe is currently generating about 0.08 per unit of risk. If you would invest  3,200  in Huber Capital Equity on September 13, 2024 and sell it today you would earn a total of  215.00  from holding Huber Capital Equity or generate 6.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Huber Capital Equity  vs.  Baillie Gifford Eafe

Huber Capital Equity

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Huber Capital Equity are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Huber Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Baillie Gifford Eafe

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Baillie Gifford Eafe are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic 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 Huber Capital and Baillie Gifford

The main advantage of trading using opposite Huber Capital and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huber Capital 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 Huber Capital Equity and Baillie Gifford Eafe 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.