Correlation Between BGF Global and IShares Equity
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By analyzing existing cross correlation between BGF Global Allocation and iShares Equity Enhanced, you can compare the effects of market volatilities on BGF Global and IShares Equity 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 IShares Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Global and IShares Equity.
Diversification Opportunities for BGF Global and IShares Equity
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BGF and IShares is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding BGF Global Allocation and iShares Equity Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Equity Enhanced 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 IShares Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Equity Enhanced has no effect on the direction of BGF Global i.e., BGF Global and IShares Equity go up and down completely randomly.
Pair Corralation between BGF Global and IShares Equity
Assuming the 90 days trading horizon BGF Global Allocation is expected to under-perform the IShares Equity. But the fund apears to be less risky and, when comparing its historical volatility, BGF Global Allocation is 1.91 times less risky than IShares Equity. The fund trades about -0.12 of its potential returns per unit of risk. The iShares Equity Enhanced is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 536.00 in iShares Equity Enhanced on October 11, 2024 and sell it today you would lose (4.00) from holding iShares Equity Enhanced or give up 0.75% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
BGF Global Allocation vs. iShares Equity Enhanced
Performance |
Timeline |
BGF Global Allocation |
iShares Equity Enhanced |
BGF Global and IShares Equity Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BGF Global and IShares Equity
The main advantage of trading using opposite BGF Global and IShares Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGF Global position performs unexpectedly, IShares Equity 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 IShares Equity will offset losses from the drop in IShares Equity's long position.BGF Global vs. Aberdeen Global Asian | BGF Global vs. Azvalor Global Value | BGF Global vs. JPMF Global Natural | BGF Global vs. Templeton Global AD |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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