Correlation Between Superior Plus and BGF World
Can any of the company-specific risk be diversified away by investing in both Superior Plus and BGF World 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 World 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 World Gold, you can compare the effects of market volatilities on Superior Plus and BGF World 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 World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and BGF World.
Diversification Opportunities for Superior Plus and BGF World
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Superior and BGF is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and BGF World Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGF World Gold 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 World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGF World Gold has no effect on the direction of Superior Plus i.e., Superior Plus and BGF World go up and down completely randomly.
Pair Corralation between Superior Plus and BGF World
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the BGF World. In addition to that, Superior Plus is 1.32 times more volatile than BGF World Gold. It trades about -0.03 of its total potential returns per unit of risk. BGF World Gold is currently generating about 0.13 per unit of volatility. If you would invest 2,711 in BGF World Gold on September 14, 2024 and sell it today you would earn a total of 1,408 from holding BGF World Gold or generate 51.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.29% |
| Values | Daily Returns |
Superior Plus Corp vs. BGF World Gold
Performance |
| Timeline |
| Superior Plus Corp |
| BGF World Gold |
Superior Plus and BGF World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and BGF World
The main advantage of trading using opposite Superior Plus and BGF World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, BGF World 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 World will offset losses from the drop in BGF World'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 World vs. Groupama Entreprises N | BGF World vs. Renaissance Europe C | BGF World vs. Superior Plus Corp | BGF World vs. Origin Agritech |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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