Correlation Between Alta Equipment and Bridgford Foods
Can any of the company-specific risk be diversified away by investing in both Alta Equipment 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 Alta Equipment and Bridgford Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alta Equipment Group and Bridgford Foods, you can compare the effects of market volatilities on Alta Equipment 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 Alta Equipment with a short position of Bridgford Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alta Equipment and Bridgford Foods.
Diversification Opportunities for Alta Equipment and Bridgford Foods
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Alta and Bridgford is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Alta Equipment Group and Bridgford Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgford Foods and Alta Equipment 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 Alta Equipment Group 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 Alta Equipment i.e., Alta Equipment and Bridgford Foods go up and down completely randomly.
Pair Corralation between Alta Equipment and Bridgford Foods
Given the investment horizon of 90 days Alta Equipment Group is expected to generate 2.68 times more return on investment than Bridgford Foods. However, Alta Equipment is 2.68 times more volatile than Bridgford Foods. It trades about 0.18 of its potential returns per unit of risk. Bridgford Foods is currently generating about 0.04 per unit of risk. If you would invest 648.00 in Alta Equipment Group on August 31, 2024 and sell it today you would earn a total of 126.00 from holding Alta Equipment Group or generate 19.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alta Equipment Group vs. Bridgford Foods
Performance |
| Timeline |
| Alta Equipment Group |
| Bridgford Foods |
Alta Equipment and Bridgford Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alta Equipment and Bridgford Foods
The main advantage of trading using opposite Alta Equipment and Bridgford Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alta Equipment 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.| Alta Equipment vs. PROG Holdings | Alta Equipment vs. GATX Corporation | Alta Equipment vs. McGrath RentCorp | Alta Equipment vs. Custom Truck One |
| Bridgford Foods vs. Seneca Foods Corp | Bridgford Foods vs. J J Snack | Bridgford Foods vs. Central Garden Pet | Bridgford Foods vs. Central Garden Pet |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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