Correlation Between Bon Natural and Bridgford Foods
Can any of the company-specific risk be diversified away by investing in both Bon Natural 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 Bon Natural and Bridgford Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bon Natural Life and Bridgford Foods, you can compare the effects of market volatilities on Bon Natural 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 Bon Natural with a short position of Bridgford Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bon Natural and Bridgford Foods.
Diversification Opportunities for Bon Natural and Bridgford Foods
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bon and Bridgford is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bon Natural Life and Bridgford Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgford Foods and Bon Natural 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 Bon Natural Life 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 Bon Natural i.e., Bon Natural and Bridgford Foods go up and down completely randomly.
Pair Corralation between Bon Natural and Bridgford Foods
Considering the 90-day investment horizon Bon Natural Life is expected to under-perform the Bridgford Foods. In addition to that, Bon Natural is 1.25 times more volatile than Bridgford Foods. It trades about -0.08 of its total potential returns per unit of risk. Bridgford Foods is currently generating about -0.01 per unit of volatility. If you would invest 1,006 in Bridgford Foods on August 24, 2024 and sell it today you would lose (106.00) from holding Bridgford Foods or give up 10.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.6% |
| Values | Daily Returns |
Bon Natural Life vs. Bridgford Foods
Performance |
| Timeline |
| Bon Natural Life |
| Bridgford Foods |
Bon Natural and Bridgford Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bon Natural and Bridgford Foods
The main advantage of trading using opposite Bon Natural and Bridgford Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bon Natural 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.| Bon Natural vs. Blue Star Foods | Bon Natural vs. Grand Havana | Bon Natural vs. Real Good Food | Bon Natural vs. Central Garden Pet |
| Bridgford Foods vs. Better Choice | Bridgford Foods vs. BioAdaptives | Bridgford Foods vs. Beyond Oil | Bridgford Foods vs. Bon Natural Life |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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