Correlation Between Pioneer Diversified and Baillie Gifford

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

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

Diversification Opportunities for Pioneer Diversified and Baillie Gifford

-0.33

Correlation Coefficient

Pioneer Diversified  Baillie Gifford

Very good diversification

The 3 months correlation between Pioneer and Baillie is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Diversified High 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 Pioneer Diversified 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 Pioneer Diversified High 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 Pioneer Diversified i.e., Pioneer Diversified and Baillie Gifford go up and down completely randomly.

Pair Corralation between Pioneer Diversified and Baillie Gifford

If you would invest  1,308  in Pioneer Diversified High on September 12, 2024 and sell it today you would earn a total of  5.00  from holding Pioneer Diversified High or generate 0.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.71%
Values	Daily Returns

Pioneer Diversified High  vs.  Baillie Gifford China

Pioneer Diversified High

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pioneer Diversified High are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pioneer Diversified is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Baillie Gifford China

Risk-Adjusted Performance

14 of 100

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 forward-looking signals, Baillie Gifford showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pioneer Diversified and Baillie Gifford

The main advantage of trading using opposite Pioneer Diversified and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pioneer Diversified 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 Pioneer Diversified High 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.