Correlation Between Blackrock and Baillie Gifford

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

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

Diversification Opportunities for Blackrock and Baillie Gifford

-0.13

Correlation Coefficient

Blackrock  Baillie Gifford

Good diversification

The 3 months correlation between Blackrock and Baillie is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Sm Cap 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 Blackrock 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 Blackrock Sm 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 Inte has no effect on the direction of Blackrock i.e., Blackrock and Baillie Gifford go up and down completely randomly.

Pair Corralation between Blackrock and Baillie Gifford

Assuming the 90 days horizon Blackrock Sm Cap is expected to under-perform the Baillie Gifford. But the mutual fund apears to be less risky and, when comparing its historical volatility, Blackrock Sm Cap is 1.21 times less risky than Baillie Gifford. The mutual fund trades about -0.19 of its potential returns per unit of risk. The Baillie Gifford International is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  771.00  in Baillie Gifford International on December 2, 2024 and sell it today you would earn a total of  68.00  from holding Baillie Gifford International or generate 8.82% return on investment over 90 days.

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

Blackrock Sm Cap  vs.  Baillie Gifford International

Blackrock Sm Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackrock Sm Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward-looking signals remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Baillie Gifford Inte

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Baillie Gifford International are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Baillie Gifford may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Blackrock and Baillie Gifford

The main advantage of trading using opposite Blackrock and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock 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 Blackrock Sm Cap 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.