Correlation Between Bridgford Foods and Arq
Can any of the company-specific risk be diversified away by investing in both Bridgford Foods and Arq 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 Arq into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgford Foods and Arq Inc, you can compare the effects of market volatilities on Bridgford Foods and Arq 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 Arq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgford Foods and Arq.
Diversification Opportunities for Bridgford Foods and Arq
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bridgford and Arq is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Bridgford Foods and Arq Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arq Inc 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 Arq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arq Inc has no effect on the direction of Bridgford Foods i.e., Bridgford Foods and Arq go up and down completely randomly.
Pair Corralation between Bridgford Foods and Arq
Given the investment horizon of 90 days Bridgford Foods is expected to generate 16.1 times less return on investment than Arq. But when comparing it to its historical volatility, Bridgford Foods is 2.1 times less risky than Arq. It trades about 0.04 of its potential returns per unit of risk. Arq Inc is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 586.00 in Arq Inc on September 1, 2024 and sell it today you would earn a total of 185.00 from holding Arq Inc or generate 31.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bridgford Foods vs. Arq Inc
Performance |
| Timeline |
| Bridgford Foods |
| Arq Inc |
Bridgford Foods and Arq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgford Foods and Arq
The main advantage of trading using opposite Bridgford Foods and Arq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgford Foods position performs unexpectedly, Arq 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 Arq will offset losses from the drop in Arq'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 |
| Arq vs. FitLife Brands, Common | Arq vs. Tyson Foods | Arq vs. Cadence Design Systems | Arq vs. Bridgford 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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