Correlation Between International Advantage and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both International Advantage 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 International Advantage and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Advantage Portfolio and Baillie Gifford Eafe, you can compare the effects of market volatilities on International Advantage 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 International Advantage with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Advantage and Baillie Gifford.
Diversification Opportunities for International Advantage and Baillie Gifford
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between International and Baillie is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding International Advantage Portfo 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 International Advantage 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 International Advantage Portfolio 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 International Advantage i.e., International Advantage and Baillie Gifford go up and down completely randomly.
Pair Corralation between International Advantage and Baillie Gifford
Assuming the 90 days horizon International Advantage Portfolio is expected to under-perform the Baillie Gifford. In addition to that, International Advantage is 1.02 times more volatile than Baillie Gifford Eafe. It trades about -0.3 of its total potential returns per unit of risk. Baillie Gifford Eafe is currently generating about -0.23 per unit of volatility. If you would invest 1,291 in Baillie Gifford Eafe on January 19, 2024 and sell it today you would lose (54.00) from holding Baillie Gifford Eafe or give up 4.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Advantage Portfo vs. Baillie Gifford Eafe
Performance |
| Timeline |
| International Advantage |
| Baillie Gifford Eafe |
International Advantage and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Advantage and Baillie Gifford
The main advantage of trading using opposite International Advantage and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Advantage 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.| International Advantage vs. Europacific Growth Fund | International Advantage vs. Europacific Growth Fund | International Advantage vs. Europacific Growth Fund |
| Baillie Gifford vs. Europacific Growth Fund | Baillie Gifford vs. Europacific Growth Fund | Baillie Gifford vs. Europacific Growth Fund |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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