Correlation Between Allegheny Technologies and Bridgford Foods
Can any of the company-specific risk be diversified away by investing in both Allegheny Technologies 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 Allegheny Technologies and Bridgford Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allegheny Technologies Incorporated and Bridgford Foods, you can compare the effects of market volatilities on Allegheny Technologies 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 Allegheny Technologies with a short position of Bridgford Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegheny Technologies and Bridgford Foods.
Diversification Opportunities for Allegheny Technologies and Bridgford Foods
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Allegheny and Bridgford is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Allegheny Technologies Incorpo and Bridgford Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgford Foods and Allegheny Technologies 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 Allegheny Technologies Incorporated 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 Allegheny Technologies i.e., Allegheny Technologies and Bridgford Foods go up and down completely randomly.
Pair Corralation between Allegheny Technologies and Bridgford Foods
Considering the 90-day investment horizon Allegheny Technologies Incorporated is expected to generate 1.17 times more return on investment than Bridgford Foods. However, Allegheny Technologies is 1.17 times more volatile than Bridgford Foods. It trades about 0.22 of its potential returns per unit of risk. Bridgford Foods is currently generating about 0.04 per unit of risk. If you would invest 5,421 in Allegheny Technologies Incorporated on August 31, 2024 and sell it today you would earn a total of 591.00 from holding Allegheny Technologies Incorporated or generate 10.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allegheny Technologies Incorpo vs. Bridgford Foods
Performance |
| Timeline |
| Allegheny Technologies |
| Bridgford Foods |
Allegheny Technologies and Bridgford Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegheny Technologies and Bridgford Foods
The main advantage of trading using opposite Allegheny Technologies and Bridgford Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegheny Technologies 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.| Allegheny Technologies vs. Worthington Industries | Allegheny Technologies vs. ESAB Corp | Allegheny Technologies vs. Insteel Industries | Allegheny Technologies vs. Northwest Pipe |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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