Correlation Between BGF Global and AXA World
Can any of the company-specific risk be diversified away by investing in both BGF Global and AXA 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 BGF Global and AXA World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BGF Global Allocation and AXA World Funds, you can compare the effects of market volatilities on BGF Global and AXA 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 BGF Global with a short position of AXA World. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Global and AXA World.
Diversification Opportunities for BGF Global and AXA World
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between BGF and AXA is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding BGF Global Allocation and AXA World Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA World Funds and BGF Global 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 BGF Global Allocation are associated (or correlated) with AXA World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXA World Funds has no effect on the direction of BGF Global i.e., BGF Global and AXA World go up and down completely randomly.
Pair Corralation between BGF Global and AXA World
Assuming the 90 days trading horizon BGF Global is expected to generate 1.3 times less return on investment than AXA World. But when comparing it to its historical volatility, BGF Global Allocation is 1.4 times less risky than AXA World. It trades about 0.22 of its potential returns per unit of risk. AXA World Funds is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 20,589 in AXA World Funds on October 24, 2024 and sell it today you would earn a total of 492.00 from holding AXA World Funds or generate 2.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BGF Global Allocation vs. AXA World Funds
Performance |
| Timeline |
| BGF Global Allocation |
| AXA World Funds |
BGF Global and AXA World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGF Global and AXA World
The main advantage of trading using opposite BGF Global and AXA World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGF Global position performs unexpectedly, AXA 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 AXA World will offset losses from the drop in AXA World's long position.| BGF Global vs. Groupama Entreprises N | BGF Global vs. Renaissance Europe C | BGF Global vs. Superior Plus Corp | BGF Global vs. Origin Agritech |
| AXA World vs. Cobas Global PP | AXA World vs. Aberdeen Global Asian | AXA World vs. BNY Mellon Global | AXA World vs. BGF Global Allocation |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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