Correlation Between Multi Strategy and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Multi Strategy 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 Multi Strategy and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Multi Strategy Growth and Baillie Gifford Health, you can compare the effects of market volatilities on Multi Strategy 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 Multi Strategy with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Strategy and Baillie Gifford.
Diversification Opportunities for Multi Strategy and Baillie Gifford
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Multi and Baillie is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding The Multi Strategy Growth and Baillie Gifford Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford Health and Multi Strategy 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 The Multi Strategy Growth 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 Health has no effect on the direction of Multi Strategy i.e., Multi Strategy and Baillie Gifford go up and down completely randomly.
Pair Corralation between Multi Strategy and Baillie Gifford
Assuming the 90 days horizon The Multi Strategy Growth is expected to generate 0.26 times more return on investment than Baillie Gifford. However, The Multi Strategy Growth is 3.82 times less risky than Baillie Gifford. It trades about 0.03 of its potential returns per unit of risk. Baillie Gifford Health is currently generating about -0.02 per unit of risk. If you would invest 1,089 in The Multi Strategy Growth on September 26, 2024 and sell it today you would earn a total of 65.00 from holding The Multi Strategy Growth or generate 5.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 99.8% |
Values | Daily Returns |
The Multi Strategy Growth vs. Baillie Gifford Health
Performance |
Timeline |
Multi Strategy |
Baillie Gifford Health |
Multi Strategy and Baillie Gifford Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Multi Strategy and Baillie Gifford
The main advantage of trading using opposite Multi Strategy and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Strategy 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.Multi Strategy vs. Lord Abbett Health | Multi Strategy vs. Fidelity Advisor Health | Multi Strategy vs. Delaware Healthcare Fund | Multi Strategy vs. Baillie Gifford Health |
Baillie Gifford vs. The Eafe Pure | Baillie Gifford vs. The Long Term | Baillie Gifford vs. Baillie Gifford International | Baillie Gifford vs. Baillie Gifford International |
Check out your portfolio center.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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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