Correlation Between Bridgford Foods and Coffee Holding
Can any of the company-specific risk be diversified away by investing in both Bridgford Foods and Coffee Holding 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 Coffee Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgford Foods and Coffee Holding Co, you can compare the effects of market volatilities on Bridgford Foods and Coffee Holding 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 Coffee Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgford Foods and Coffee Holding.
Diversification Opportunities for Bridgford Foods and Coffee Holding
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bridgford and Coffee is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bridgford Foods and Coffee Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coffee Holding 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 Coffee Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coffee Holding has no effect on the direction of Bridgford Foods i.e., Bridgford Foods and Coffee Holding go up and down completely randomly.
Pair Corralation between Bridgford Foods and Coffee Holding
Given the investment horizon of 90 days Bridgford Foods is expected to under-perform the Coffee Holding. But the stock apears to be less risky and, when comparing its historical volatility, Bridgford Foods is 1.64 times less risky than Coffee Holding. The stock trades about -0.01 of its potential returns per unit of risk. The Coffee Holding Co is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 132.00 in Coffee Holding Co on August 24, 2024 and sell it today you would earn a total of 231.00 from holding Coffee Holding Co or generate 175.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.6% |
| Values | Daily Returns |
Bridgford Foods vs. Coffee Holding Co
Performance |
| Timeline |
| Bridgford Foods |
| Coffee Holding |
Bridgford Foods and Coffee Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgford Foods and Coffee Holding
The main advantage of trading using opposite Bridgford Foods and Coffee Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgford Foods position performs unexpectedly, Coffee Holding 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 Coffee Holding will offset losses from the drop in Coffee Holding's long position.| Bridgford Foods vs. Better Choice | Bridgford Foods vs. BioAdaptives | Bridgford Foods vs. Beyond Oil | Bridgford Foods vs. Bon Natural Life |
| Coffee Holding vs. Seneca Foods Corp | Coffee Holding vs. Natures Sunshine Products | Coffee Holding vs. J J Snack | Coffee Holding vs. John B Sanfilippo |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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