Correlation Between Bridgford Foods and Alaska Air
Can any of the company-specific risk be diversified away by investing in both Bridgford Foods and Alaska Air 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 Alaska Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgford Foods and Alaska Air Group, you can compare the effects of market volatilities on Bridgford Foods and Alaska Air 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 Alaska Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgford Foods and Alaska Air.
Diversification Opportunities for Bridgford Foods and Alaska Air
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bridgford and Alaska is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bridgford Foods and Alaska Air Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alaska Air Group 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 Alaska Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alaska Air Group has no effect on the direction of Bridgford Foods i.e., Bridgford Foods and Alaska Air go up and down completely randomly.
Pair Corralation between Bridgford Foods and Alaska Air
Given the investment horizon of 90 days Bridgford Foods is expected to generate 3.9 times less return on investment than Alaska Air. In addition to that, Bridgford Foods is 1.54 times more volatile than Alaska Air Group. It trades about 0.03 of its total potential returns per unit of risk. Alaska Air Group is currently generating about 0.15 per unit of volatility. If you would invest 4,118 in Alaska Air Group on September 19, 2024 and sell it today you would earn a total of 2,202 from holding Alaska Air Group or generate 53.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.4% |
| Values | Daily Returns |
Bridgford Foods vs. Alaska Air Group
Performance |
| Timeline |
| Bridgford Foods |
| Alaska Air Group |
Bridgford Foods and Alaska Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgford Foods and Alaska Air
The main advantage of trading using opposite Bridgford Foods and Alaska Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgford Foods position performs unexpectedly, Alaska Air 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 Alaska Air will offset losses from the drop in Alaska Air's long position.| Bridgford Foods vs. J J Snack | Bridgford Foods vs. Central Garden Pet | Bridgford Foods vs. Central Garden Pet | Bridgford Foods vs. Lancaster Colony |
| Alaska Air vs. Delta Air Lines | Alaska Air vs. United Airlines Holdings | Alaska Air vs. American Airlines Group | Alaska Air vs. JetBlue Airways Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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