Correlation Between Bridgford Foods and ICC Holdings
Can any of the company-specific risk be diversified away by investing in both Bridgford Foods and ICC Holdings 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 ICC Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgford Foods and ICC Holdings, you can compare the effects of market volatilities on Bridgford Foods and ICC Holdings 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 ICC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgford Foods and ICC Holdings.
Diversification Opportunities for Bridgford Foods and ICC Holdings
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bridgford and ICC is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bridgford Foods and ICC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICC Holdings 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 ICC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICC Holdings has no effect on the direction of Bridgford Foods i.e., Bridgford Foods and ICC Holdings go up and down completely randomly.
Pair Corralation between Bridgford Foods and ICC Holdings
Given the investment horizon of 90 days Bridgford Foods is expected to under-perform the ICC Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Bridgford Foods is 19.14 times less risky than ICC Holdings. The stock trades about -0.01 of its potential returns per unit of risk. The ICC Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,525 in ICC Holdings on August 24, 2024 and sell it today you would earn a total of 782.01 from holding ICC Holdings or generate 51.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 85.34% |
| Values | Daily Returns |
Bridgford Foods vs. ICC Holdings
Performance |
| Timeline |
| Bridgford Foods |
| ICC Holdings |
Bridgford Foods and ICC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgford Foods and ICC Holdings
The main advantage of trading using opposite Bridgford Foods and ICC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgford Foods position performs unexpectedly, ICC Holdings 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 ICC Holdings will offset losses from the drop in ICC Holdings' long position.| Bridgford Foods vs. Better Choice | Bridgford Foods vs. BioAdaptives | Bridgford Foods vs. Beyond Oil | Bridgford Foods vs. Bon Natural Life |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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