Correlation Between BG Foods and Fresh Del
Can any of the company-specific risk be diversified away by investing in both BG Foods and Fresh Del 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 BG Foods and Fresh Del into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BG Foods and Fresh Del Monte, you can compare the effects of market volatilities on BG Foods and Fresh Del 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 BG Foods with a short position of Fresh Del. Check out your portfolio center. Please also check ongoing floating volatility patterns of BG Foods and Fresh Del.
Diversification Opportunities for BG Foods and Fresh Del
Pay attention - limited upside
The 3 months correlation between BGS and Fresh is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding BG Foods and Fresh Del Monte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresh Del Monte and BG Foods 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 BG Foods are associated (or correlated) with Fresh Del. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresh Del Monte has no effect on the direction of BG Foods i.e., BG Foods and Fresh Del go up and down completely randomly.
Pair Corralation between BG Foods and Fresh Del
Considering the 90-day investment horizon BG Foods is expected to under-perform the Fresh Del. In addition to that, BG Foods is 1.92 times more volatile than Fresh Del Monte. It trades about -0.1 of its total potential returns per unit of risk. Fresh Del Monte is currently generating about 0.16 per unit of volatility. If you would invest 2,821 in Fresh Del Monte on August 23, 2024 and sell it today you would earn a total of 539.00 from holding Fresh Del Monte or generate 19.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BG Foods vs. Fresh Del Monte
Performance |
| Timeline |
| BG Foods |
| Fresh Del Monte |
BG Foods and Fresh Del Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BG Foods and Fresh Del
The main advantage of trading using opposite BG Foods and Fresh Del positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BG Foods position performs unexpectedly, Fresh Del 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 Fresh Del will offset losses from the drop in Fresh Del's long position.| BG Foods vs. Better Choice | BG Foods vs. BioAdaptives | BG Foods vs. Beyond Oil | BG Foods vs. Bon Natural Life |
| Fresh Del vs. Limoneira Co | Fresh Del vs. Alico Inc | Fresh Del vs. Adecoagro SA | Fresh Del vs. Cal Maine Foods |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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