Correlation Between Bridgford Foods and AmTrust Financial
Can any of the company-specific risk be diversified away by investing in both Bridgford Foods and AmTrust Financial 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 Bridgford Foods and AmTrust Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgford Foods and AmTrust Financial Services, you can compare the effects of market volatilities on Bridgford Foods and AmTrust Financial 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 Bridgford Foods with a short position of AmTrust Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgford Foods and AmTrust Financial.
Diversification Opportunities for Bridgford Foods and AmTrust Financial
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bridgford and AmTrust is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bridgford Foods and AmTrust Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmTrust Financial and Bridgford 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 Bridgford Foods are associated (or correlated) with AmTrust Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmTrust Financial has no effect on the direction of Bridgford Foods i.e., Bridgford Foods and AmTrust Financial go up and down completely randomly.
Pair Corralation between Bridgford Foods and AmTrust Financial
Given the investment horizon of 90 days Bridgford Foods is expected to generate 1.49 times more return on investment than AmTrust Financial. However, Bridgford Foods is 1.49 times more volatile than AmTrust Financial Services. It trades about 0.15 of its potential returns per unit of risk. AmTrust Financial Services is currently generating about 0.06 per unit of risk. If you would invest 881.00 in Bridgford Foods on September 4, 2024 and sell it today you would earn a total of 52.00 from holding Bridgford Foods or generate 5.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Bridgford Foods vs. AmTrust Financial Services
Performance |
| Timeline |
| Bridgford Foods |
| AmTrust Financial |
Bridgford Foods and AmTrust Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgford Foods and AmTrust Financial
The main advantage of trading using opposite Bridgford Foods and AmTrust Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgford Foods position performs unexpectedly, AmTrust Financial 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 AmTrust Financial will offset losses from the drop in AmTrust Financial's long position.| Bridgford Foods vs. Seneca Foods Corp | Bridgford Foods vs. J J Snack | Bridgford Foods vs. Central Garden Pet | Bridgford Foods vs. Central Garden Pet |
| AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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