Correlation Between Bridgford Foods and Humatech
Can any of the company-specific risk be diversified away by investing in both Bridgford Foods and Humatech 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 Humatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgford Foods and Humatech, you can compare the effects of market volatilities on Bridgford Foods and Humatech 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 Humatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgford Foods and Humatech.
Diversification Opportunities for Bridgford Foods and Humatech
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bridgford and Humatech is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bridgford Foods and Humatech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humatech 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 Humatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humatech has no effect on the direction of Bridgford Foods i.e., Bridgford Foods and Humatech go up and down completely randomly.
Pair Corralation between Bridgford Foods and Humatech
Given the investment horizon of 90 days Bridgford Foods is expected to under-perform the Humatech. But the stock apears to be less risky and, when comparing its historical volatility, Bridgford Foods is 39.66 times less risky than Humatech. The stock trades about -0.09 of its potential returns per unit of risk. The Humatech is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Humatech on September 4, 2024 and sell it today you would earn a total of 0.17 from holding Humatech or generate 1700.0% 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. Humatech
Performance |
| Timeline |
| Bridgford Foods |
| Humatech |
Bridgford Foods and Humatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgford Foods and Humatech
The main advantage of trading using opposite Bridgford Foods and Humatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgford Foods position performs unexpectedly, Humatech 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 Humatech will offset losses from the drop in Humatech'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 |
| Humatech vs. Aldel Financial II | Humatech vs. Jacobs Solutions | Humatech vs. Inflection Point Acquisition | Humatech 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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