Correlation Between Beyond Oil and Bridgford Foods
Can any of the company-specific risk be diversified away by investing in both Beyond Oil 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 Beyond Oil and Bridgford Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beyond Oil and Bridgford Foods, you can compare the effects of market volatilities on Beyond Oil 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 Beyond Oil with a short position of Bridgford Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beyond Oil and Bridgford Foods.
Diversification Opportunities for Beyond Oil and Bridgford Foods
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Beyond and Bridgford is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Oil and Bridgford Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgford Foods and Beyond Oil 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 Beyond Oil 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 Beyond Oil i.e., Beyond Oil and Bridgford Foods go up and down completely randomly.
Pair Corralation between Beyond Oil and Bridgford Foods
Assuming the 90 days horizon Beyond Oil is expected to generate 2.44 times more return on investment than Bridgford Foods. However, Beyond Oil is 2.44 times more volatile than Bridgford Foods. It trades about 0.21 of its potential returns per unit of risk. Bridgford Foods is currently generating about 0.13 per unit of risk. If you would invest 106.00 in Beyond Oil on November 18, 2024 and sell it today you would earn a total of 79.00 from holding Beyond Oil or generate 74.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beyond Oil vs. Bridgford Foods
Performance |
| Timeline |
| Beyond Oil |
| Bridgford Foods |
Beyond Oil and Bridgford Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beyond Oil and Bridgford Foods
The main advantage of trading using opposite Beyond Oil and Bridgford Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Oil 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.| Beyond Oil vs. Radcom | Beyond Oil vs. Where Food Comes | Beyond Oil vs. Better Choice | Beyond Oil vs. Space Communication |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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