Correlation Between BGF Global and Caixabank Seleccin

Can any of the company-specific risk be diversified away by investing in both BGF Global and Caixabank Seleccin 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 Caixabank Seleccin 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 Caixabank Seleccin Tendencias, you can compare the effects of market volatilities on BGF Global and Caixabank Seleccin 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 Caixabank Seleccin. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Global and Caixabank Seleccin.

Diversification Opportunities for BGF Global and Caixabank Seleccin

0.93

Correlation Coefficient

BGF Global  Caixabank Seleccin

Almost no diversification

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

Pair Corralation between BGF Global and Caixabank Seleccin

Assuming the 90 days trading horizon BGF Global Allocation is expected to generate 1.26 times more return on investment than Caixabank Seleccin. However, BGF Global is 1.26 times more volatile than Caixabank Seleccin Tendencias. It trades about -0.06 of its potential returns per unit of risk. Caixabank Seleccin Tendencias is currently generating about -0.14 per unit of risk. If you would invest  7,613  in BGF Global Allocation on September 23, 2024 and sell it today you would lose (60.00) from holding BGF Global Allocation or give up 0.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	86.36%
Values	Daily Returns

BGF Global Allocation  vs.  Caixabank Seleccin Tendencias

BGF Global Allocation

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BGF Global Allocation are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, BGF Global is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Caixabank Seleccin

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Caixabank Seleccin Tendencias are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Caixabank Seleccin may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with BGF Global and Caixabank Seleccin

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

The idea behind BGF Global Allocation and Caixabank Seleccin Tendencias 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.