Correlation Between Bridgford Foods and Blue Sphere
Can any of the company-specific risk be diversified away by investing in both Bridgford Foods and Blue Sphere 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 Blue Sphere into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgford Foods and Blue Sphere Corp, you can compare the effects of market volatilities on Bridgford Foods and Blue Sphere 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 Blue Sphere. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgford Foods and Blue Sphere.
Diversification Opportunities for Bridgford Foods and Blue Sphere
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bridgford and Blue is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bridgford Foods and Blue Sphere Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Sphere Corp 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 Blue Sphere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Sphere Corp has no effect on the direction of Bridgford Foods i.e., Bridgford Foods and Blue Sphere go up and down completely randomly.
Pair Corralation between Bridgford Foods and Blue Sphere
Given the investment horizon of 90 days Bridgford Foods is expected to generate 617.39 times less return on investment than Blue Sphere. But when comparing it to its historical volatility, Bridgford Foods is 201.67 times less risky than Blue Sphere. It trades about 0.14 of its potential returns per unit of risk. Blue Sphere Corp is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Blue Sphere Corp on November 1, 2024 and sell it today you would lose 0.00 from holding Blue Sphere Corp or give up 0.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bridgford Foods vs. Blue Sphere Corp
Performance |
| Timeline |
| Bridgford Foods |
| Blue Sphere Corp |
Bridgford Foods and Blue Sphere Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgford Foods and Blue Sphere
The main advantage of trading using opposite Bridgford Foods and Blue Sphere positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgford Foods position performs unexpectedly, Blue Sphere 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 Blue Sphere will offset losses from the drop in Blue Sphere'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 |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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