Correlation Between Afya and Bridgford Foods
Can any of the company-specific risk be diversified away by investing in both Afya and Bridgford Foods 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 Afya and Bridgford Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Afya and Bridgford Foods, you can compare the effects of market volatilities on Afya and Bridgford Foods 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 Afya with a short position of Bridgford Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afya and Bridgford Foods.
Diversification Opportunities for Afya and Bridgford Foods
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Afya and Bridgford is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Afya and Bridgford Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgford Foods and Afya 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 Afya are associated (or correlated) with Bridgford Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgford Foods has no effect on the direction of Afya i.e., Afya and Bridgford Foods go up and down completely randomly.
Pair Corralation between Afya and Bridgford Foods
Given the investment horizon of 90 days Afya is expected to under-perform the Bridgford Foods. But the stock apears to be less risky and, when comparing its historical volatility, Afya is 1.32 times less risky than Bridgford Foods. The stock trades about -0.03 of its potential returns per unit of risk. The Bridgford Foods is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,058 in Bridgford Foods on August 26, 2024 and sell it today you would lose (135.00) from holding Bridgford Foods or give up 12.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Afya vs. Bridgford Foods
Performance |
| Timeline |
| Afya |
| Bridgford Foods |
Afya and Bridgford Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Afya and Bridgford Foods
The main advantage of trading using opposite Afya and Bridgford Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afya position performs unexpectedly, Bridgford Foods 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 Bridgford Foods will offset losses from the drop in Bridgford Foods' long position.| Afya vs. Laureate Education | Afya vs. American Public Education | Afya vs. Lincoln Educational Services | Afya vs. Adtalem Global Education |
| Bridgford Foods vs. Bellring Brands LLC | Bridgford Foods vs. Ingredion Incorporated | Bridgford Foods vs. Nomad Foods | Bridgford Foods vs. Post Holdings |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |