Correlation Between Cobas Global and BGF Latin

Can any of the company-specific risk be diversified away by investing in both Cobas Global and BGF Latin 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 Cobas Global and BGF Latin into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cobas Global PP and BGF Latin American, you can compare the effects of market volatilities on Cobas Global and BGF Latin 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 Cobas Global with a short position of BGF Latin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cobas Global and BGF Latin.

Diversification Opportunities for Cobas Global and BGF Latin

0.0

Correlation Coefficient

Cobas Global  BGF Latin

Pay attention - limited upside

The 3 months correlation between Cobas and BGF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cobas Global PP and BGF Latin American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGF Latin American and Cobas 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 Cobas Global PP are associated (or correlated) with BGF Latin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGF Latin American has no effect on the direction of Cobas Global i.e., Cobas Global and BGF Latin go up and down completely randomly.

Pair Corralation between Cobas Global and BGF Latin

If you would invest  12,159  in Cobas Global PP on December 20, 2024 and sell it today you would earn a total of  860.00  from holding Cobas Global PP or generate 7.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Cobas Global PP  vs.  BGF Latin American

Cobas Global PP

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cobas Global PP are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Cobas Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

BGF Latin American

Risk-Adjusted Performance

Very Weak

Over the last 90 days BGF Latin American has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound fundamental indicators, BGF Latin is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Cobas Global and BGF Latin

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

The idea behind Cobas Global PP and BGF Latin American 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.