Correlation Between Bridgford Foods and Distoken Acquisition
Can any of the company-specific risk be diversified away by investing in both Bridgford Foods and Distoken Acquisition 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 Distoken Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgford Foods and Distoken Acquisition, you can compare the effects of market volatilities on Bridgford Foods and Distoken Acquisition 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 Distoken Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgford Foods and Distoken Acquisition.
Diversification Opportunities for Bridgford Foods and Distoken Acquisition
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bridgford and Distoken is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bridgford Foods and Distoken Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Distoken Acquisition 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 Distoken Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Distoken Acquisition has no effect on the direction of Bridgford Foods i.e., Bridgford Foods and Distoken Acquisition go up and down completely randomly.
Pair Corralation between Bridgford Foods and Distoken Acquisition
Given the investment horizon of 90 days Bridgford Foods is expected to generate 12.86 times less return on investment than Distoken Acquisition. In addition to that, Bridgford Foods is 4.68 times more volatile than Distoken Acquisition. It trades about 0.0 of its total potential returns per unit of risk. Distoken Acquisition is currently generating about 0.26 per unit of volatility. If you would invest 1,087 in Distoken Acquisition on September 3, 2024 and sell it today you would earn a total of 50.00 from holding Distoken Acquisition or generate 4.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bridgford Foods vs. Distoken Acquisition
Performance |
| Timeline |
| Bridgford Foods |
| Distoken Acquisition |
Bridgford Foods and Distoken Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgford Foods and Distoken Acquisition
The main advantage of trading using opposite Bridgford Foods and Distoken Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgford Foods position performs unexpectedly, Distoken Acquisition 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 Distoken Acquisition will offset losses from the drop in Distoken Acquisition'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 |
| Distoken Acquisition vs. Marblegate Acquisition Corp | Distoken Acquisition vs. Alpha One | Distoken Acquisition vs. Manaris Corp | Distoken Acquisition vs. SCOR PK |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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