Correlation Between BGF Global and FF Global

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both BGF Global and FF 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 BGF Global and FF Global 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 FF Global, you can compare the effects of market volatilities on BGF Global and FF 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 BGF Global with a short position of FF Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Global and FF Global.

Diversification Opportunities for BGF Global and FF Global

0.93
  Correlation Coefficient

Almost no diversification

The 3 months correlation between BGF and FJ2P is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding BGF Global Allocation and FF Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FF Global 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 FF Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FF Global has no effect on the direction of BGF Global i.e., BGF Global and FF Global go up and down completely randomly.

Pair Corralation between BGF Global and FF Global

Assuming the 90 days trading horizon BGF Global is expected to generate 2.06 times less return on investment than FF Global. But when comparing it to its historical volatility, BGF Global Allocation is 1.54 times less risky than FF Global. It trades about 0.2 of its potential returns per unit of risk. FF Global is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  7,122  in FF Global on September 12, 2024 and sell it today you would earn a total of  348.00  from holding FF Global or generate 4.89% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

BGF Global Allocation  vs.  FF Global

 Performance 
       Timeline  
BGF Global Allocation 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in BGF Global Allocation are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather weak technical and fundamental indicators, BGF Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.
FF Global 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in FF Global are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather weak technical and fundamental indicators, FF Global exhibited solid returns over the last few months and may actually be approaching a breakup point.

BGF Global and FF Global Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with BGF Global and FF Global

The main advantage of trading using opposite BGF Global and FF Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGF Global position performs unexpectedly, FF 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 FF Global will offset losses from the drop in FF Global's long position.
The idea behind BGF Global Allocation and FF 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.
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

Other Complementary Tools

Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
CEOs Directory
Screen CEOs from public companies around the world
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Stocks Directory
Find actively traded stocks across global markets
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm