Correlation Between Baillie Gifford and Blackrock Build

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

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

Diversification Opportunities for Baillie Gifford and Blackrock Build

-0.39

Correlation Coefficient

Baillie Gifford  Blackrock Build

Very good diversification

The 3 months correlation between Baillie and Blackrock is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford China and Blackrock Build America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Build America and Baillie Gifford 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 Baillie Gifford China are associated (or correlated) with Blackrock Build. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Build America has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and Blackrock Build go up and down completely randomly.

Pair Corralation between Baillie Gifford and Blackrock Build

Assuming the 90 days horizon Baillie Gifford China is expected to generate 4.64 times more return on investment than Blackrock Build. However, Baillie Gifford is 4.64 times more volatile than Blackrock Build America. It trades about 0.13 of its potential returns per unit of risk. Blackrock Build America is currently generating about -0.17 per unit of risk. If you would invest  445.00  in Baillie Gifford China on September 16, 2024 and sell it today you would earn a total of  94.00  from holding Baillie Gifford China or generate 21.12% return on investment over 90 days.

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

Baillie Gifford China  vs.  Blackrock Build America

Baillie Gifford China

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Baillie Gifford China are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Baillie Gifford showed solid returns over the last few months and may actually be approaching a breakup point.

Blackrock Build America

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Build America has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Blackrock Build is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Baillie Gifford and Blackrock Build

The main advantage of trading using opposite Baillie Gifford and Blackrock Build positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford position performs unexpectedly, Blackrock Build 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 Blackrock Build will offset losses from the drop in Blackrock Build's long position.

The idea behind Baillie Gifford China and Blackrock Build America 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.