Correlation Between BGF Euro and BGF Asian

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

By analyzing existing cross correlation between BGF Euro Markets and BGF Asian Tiger, you can compare the effects of market volatilities on BGF Euro and BGF Asian 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 Euro with a short position of BGF Asian. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Euro and BGF Asian.

Diversification Opportunities for BGF Euro and BGF Asian

0.0

Correlation Coefficient

BGF Euro  BGF Asian

Pay attention - limited upside

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

Pair Corralation between BGF Euro and BGF Asian

If you would invest  4,488  in BGF Euro Markets on December 19, 2024 and sell it today you would earn a total of  388.00  from holding BGF Euro Markets or generate 8.65% return on investment over 90 days.

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

BGF Euro Markets  vs.  BGF Asian Tiger

BGF Euro Markets

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BGF Euro Markets are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather weak technical and fundamental indicators, BGF Euro may actually be approaching a critical reversion point that can send shares even higher in April 2025.

BGF Asian Tiger

Risk-Adjusted Performance

Very Weak

Over the last 90 days BGF Asian Tiger has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, BGF Asian is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BGF Euro and BGF Asian

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

The idea behind BGF Euro Markets and BGF Asian Tiger 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.