Correlation Between Bridgford Foods and Danone SA
Can any of the company-specific risk be diversified away by investing in both Bridgford Foods and Danone SA 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 Danone SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgford Foods and Danone SA, you can compare the effects of market volatilities on Bridgford Foods and Danone SA 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 Danone SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgford Foods and Danone SA.
Diversification Opportunities for Bridgford Foods and Danone SA
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bridgford and Danone is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bridgford Foods and Danone SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danone SA 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 Danone SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danone SA has no effect on the direction of Bridgford Foods i.e., Bridgford Foods and Danone SA go up and down completely randomly.
Pair Corralation between Bridgford Foods and Danone SA
Given the investment horizon of 90 days Bridgford Foods is expected to generate 2.66 times less return on investment than Danone SA. In addition to that, Bridgford Foods is 2.27 times more volatile than Danone SA. It trades about 0.01 of its total potential returns per unit of risk. Danone SA is currently generating about 0.03 per unit of volatility. If you would invest 6,419 in Danone SA on November 3, 2024 and sell it today you would earn a total of 568.00 from holding Danone SA or generate 8.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.1% |
| Values | Daily Returns |
Bridgford Foods vs. Danone SA
Performance |
| Timeline |
| Bridgford Foods |
| Danone SA |
Bridgford Foods and Danone SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgford Foods and Danone SA
The main advantage of trading using opposite Bridgford Foods and Danone SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgford Foods position performs unexpectedly, Danone SA 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 Danone SA will offset losses from the drop in Danone SA'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 |
| Danone SA vs. Lifevantage | Danone SA vs. Simply Good Foods | Danone SA vs. Bellring Brands LLC | Danone SA 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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