Correlation Between Bridgford Foods and Arrow Electronics
Can any of the company-specific risk be diversified away by investing in both Bridgford Foods and Arrow Electronics 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 Arrow Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgford Foods and Arrow Electronics, you can compare the effects of market volatilities on Bridgford Foods and Arrow Electronics 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 Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgford Foods and Arrow Electronics.
Diversification Opportunities for Bridgford Foods and Arrow Electronics
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bridgford and Arrow is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Bridgford Foods and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics 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 Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of Bridgford Foods i.e., Bridgford Foods and Arrow Electronics go up and down completely randomly.
Pair Corralation between Bridgford Foods and Arrow Electronics
Given the investment horizon of 90 days Bridgford Foods is expected to under-perform the Arrow Electronics. In addition to that, Bridgford Foods is 1.64 times more volatile than Arrow Electronics. It trades about -0.01 of its total potential returns per unit of risk. Arrow Electronics is currently generating about 0.01 per unit of volatility. If you would invest 11,982 in Arrow Electronics on September 4, 2024 and sell it today you would earn a total of 278.00 from holding Arrow Electronics or generate 2.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.62% |
| Values | Daily Returns |
Bridgford Foods vs. Arrow Electronics
Performance |
| Timeline |
| Bridgford Foods |
| Arrow Electronics |
Bridgford Foods and Arrow Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgford Foods and Arrow Electronics
The main advantage of trading using opposite Bridgford Foods and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgford Foods position performs unexpectedly, Arrow Electronics 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 Arrow Electronics will offset losses from the drop in Arrow Electronics' 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 |
| Arrow Electronics vs. Insight Enterprises | Arrow Electronics vs. ScanSource | Arrow Electronics vs. PC Connection | Arrow Electronics vs. Aquagold International |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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