Correlation Between Superior Plus and BGF Global
Can any of the company-specific risk be diversified away by investing in both Superior Plus and BGF Global 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 Superior Plus and BGF Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and BGF Global Allocation, you can compare the effects of market volatilities on Superior Plus and BGF Global 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 Superior Plus with a short position of BGF Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and BGF Global.
Diversification Opportunities for Superior Plus and BGF Global
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Superior and BGF is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and BGF Global Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGF Global Allocation and Superior Plus 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 Superior Plus Corp are associated (or correlated) with BGF Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGF Global Allocation has no effect on the direction of Superior Plus i.e., Superior Plus and BGF Global go up and down completely randomly.
Pair Corralation between Superior Plus and BGF Global
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the BGF Global. In addition to that, Superior Plus is 2.59 times more volatile than BGF Global Allocation. It trades about -0.02 of its total potential returns per unit of risk. BGF Global Allocation is currently generating about 0.08 per unit of volatility. If you would invest 6,830 in BGF Global Allocation on September 14, 2024 and sell it today you would earn a total of 892.00 from holding BGF Global Allocation or generate 13.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 41.87% |
| Values | Daily Returns |
Superior Plus Corp vs. BGF Global Allocation
Performance |
| Timeline |
| Superior Plus Corp |
| BGF Global Allocation |
Superior Plus and BGF Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and BGF Global
The main advantage of trading using opposite Superior Plus and BGF Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, BGF Global 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 BGF Global will offset losses from the drop in BGF Global's long position.| Superior Plus vs. Boiron SA | Superior Plus vs. COSMOSTEEL HLDGS | Superior Plus vs. Vastned Retail NV | Superior Plus vs. BURLINGTON STORES |
| BGF Global vs. BGF World Gold | BGF Global vs. BGF Global Allocation | BGF Global vs. BGF Euro Markets | BGF Global vs. BGF World Gold |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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