Correlation Between BG Foods and Pilgrims Pride
Can any of the company-specific risk be diversified away by investing in both BG Foods and Pilgrims Pride 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 Pilgrims Pride into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BG Foods and Pilgrims Pride Corp, you can compare the effects of market volatilities on BG Foods and Pilgrims Pride 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 Pilgrims Pride. Check out your portfolio center. Please also check ongoing floating volatility patterns of BG Foods and Pilgrims Pride.
Diversification Opportunities for BG Foods and Pilgrims Pride
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BGS and Pilgrims is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding BG Foods and Pilgrims Pride Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pilgrims Pride Corp 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 Pilgrims Pride. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pilgrims Pride Corp has no effect on the direction of BG Foods i.e., BG Foods and Pilgrims Pride go up and down completely randomly.
Pair Corralation between BG Foods and Pilgrims Pride
Considering the 90-day investment horizon BG Foods is expected to under-perform the Pilgrims Pride. In addition to that, BG Foods is 2.38 times more volatile than Pilgrims Pride Corp. It trades about -0.2 of its total potential returns per unit of risk. Pilgrims Pride Corp is currently generating about 0.28 per unit of volatility. If you would invest 4,584 in Pilgrims Pride Corp on August 24, 2024 and sell it today you would earn a total of 612.50 from holding Pilgrims Pride Corp or generate 13.36% 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. Pilgrims Pride Corp
Performance |
| Timeline |
| BG Foods |
| Pilgrims Pride Corp |
BG Foods and Pilgrims Pride Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BG Foods and Pilgrims Pride
The main advantage of trading using opposite BG Foods and Pilgrims Pride positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BG Foods position performs unexpectedly, Pilgrims Pride 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 Pilgrims Pride will offset losses from the drop in Pilgrims Pride's long position.The idea behind BG Foods and Pilgrims Pride Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Pilgrims Pride vs. Bellring Brands LLC | Pilgrims Pride vs. Treehouse Foods | Pilgrims Pride vs. Ingredion Incorporated | Pilgrims Pride vs. JM Smucker |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |