Correlation Between American Healthcare and Bridgford Foods
Can any of the company-specific risk be diversified away by investing in both American Healthcare 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 American Healthcare and Bridgford Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Healthcare REIT, and Bridgford Foods, you can compare the effects of market volatilities on American Healthcare 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 American Healthcare with a short position of Bridgford Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Healthcare and Bridgford Foods.
Diversification Opportunities for American Healthcare and Bridgford Foods
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Bridgford is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding American Healthcare REIT, and Bridgford Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgford Foods and American Healthcare 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 American Healthcare REIT, 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 American Healthcare i.e., American Healthcare and Bridgford Foods go up and down completely randomly.
Pair Corralation between American Healthcare and Bridgford Foods
Considering the 90-day investment horizon American Healthcare is expected to generate 1.54 times less return on investment than Bridgford Foods. But when comparing it to its historical volatility, American Healthcare REIT, is 1.11 times less risky than Bridgford Foods. It trades about 0.1 of its potential returns per unit of risk. Bridgford Foods is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 892.00 in Bridgford Foods on November 1, 2024 and sell it today you would earn a total of 158.00 from holding Bridgford Foods or generate 17.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Healthcare REIT, vs. Bridgford Foods
Performance |
| Timeline |
| American Healthcare REIT, |
| Bridgford Foods |
American Healthcare and Bridgford Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Healthcare and Bridgford Foods
The main advantage of trading using opposite American Healthcare and Bridgford Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Healthcare 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.| American Healthcare vs. Black Hills | American Healthcare vs. Goosehead Insurance | American Healthcare vs. Two Harbors Investments | American Healthcare vs. Southern Home Medicl |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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