Correlation Between Baillie Gifford and FIRST TRUST

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

By analyzing existing cross correlation between Baillie Gifford Growth and FIRST TRUST GLOBAL, you can compare the effects of market volatilities on Baillie Gifford and FIRST TRUST 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 FIRST TRUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and FIRST TRUST.

Diversification Opportunities for Baillie Gifford and FIRST TRUST

-0.78

Correlation Coefficient

Baillie Gifford  FIRST TRUST

Pay attention - limited upside

The 3 months correlation between Baillie and FIRST is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Growth and FIRST TRUST GLOBAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST TRUST GLOBAL 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 Growth are associated (or correlated) with FIRST TRUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST TRUST GLOBAL has no effect on the direction of Baillie Gifford i.e., Baillie Gifford and FIRST TRUST go up and down completely randomly.

Pair Corralation between Baillie Gifford and FIRST TRUST

Assuming the 90 days trading horizon Baillie Gifford Growth is expected to generate 0.08 times more return on investment than FIRST TRUST. However, Baillie Gifford Growth is 12.51 times less risky than FIRST TRUST. It trades about 0.29 of its potential returns per unit of risk. FIRST TRUST GLOBAL is currently generating about -0.11 per unit of risk. If you would invest  21,800  in Baillie Gifford Growth on April 24, 2025 and sell it today you would earn a total of  4,250  from holding Baillie Gifford Growth or generate 19.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Baillie Gifford Growth  vs.  FIRST TRUST GLOBAL

Baillie Gifford Growth

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Baillie Gifford Growth are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Baillie Gifford exhibited solid returns over the last few months and may actually be approaching a breakup point.

FIRST TRUST GLOBAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days FIRST TRUST GLOBAL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Pair Trading with Baillie Gifford and FIRST TRUST

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

The idea behind Baillie Gifford Growth and FIRST TRUST GLOBAL 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.