Correlation Between Bridgford Foods and Eastman Kodak

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Can any of the company-specific risk be diversified away by investing in both Bridgford Foods and Eastman Kodak 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 Eastman Kodak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgford Foods and Eastman Kodak Co, you can compare the effects of market volatilities on Bridgford Foods and Eastman Kodak 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 Eastman Kodak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgford Foods and Eastman Kodak.

Diversification Opportunities for Bridgford Foods and Eastman Kodak

0.61
  Correlation Coefficient

Poor diversification

The 3 months correlation between Bridgford and Eastman is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bridgford Foods and Eastman Kodak Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Kodak 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 Eastman Kodak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastman Kodak has no effect on the direction of Bridgford Foods i.e., Bridgford Foods and Eastman Kodak go up and down completely randomly.

Pair Corralation between Bridgford Foods and Eastman Kodak

Given the investment horizon of 90 days Bridgford Foods is expected to generate 1.62 times less return on investment than Eastman Kodak. But when comparing it to its historical volatility, Bridgford Foods is 3.11 times less risky than Eastman Kodak. It trades about 0.32 of its potential returns per unit of risk. Eastman Kodak Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  550.00  in Eastman Kodak Co on September 13, 2024 and sell it today you would earn a total of  128.00  from holding Eastman Kodak Co or generate 23.27% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Bridgford Foods  vs.  Eastman Kodak Co

 Performance 
       Timeline  
Bridgford Foods 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Bridgford Foods are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward indicators, Bridgford Foods exhibited solid returns over the last few months and may actually be approaching a breakup point.
Eastman Kodak 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Eastman Kodak Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating fundamental indicators, Eastman Kodak disclosed solid returns over the last few months and may actually be approaching a breakup point.

Bridgford Foods and Eastman Kodak Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bridgford Foods and Eastman Kodak

The main advantage of trading using opposite Bridgford Foods and Eastman Kodak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgford Foods position performs unexpectedly, Eastman Kodak 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 Eastman Kodak will offset losses from the drop in Eastman Kodak's long position.
The idea behind Bridgford Foods and Eastman Kodak Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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