Correlation Between Bridgford Foods and Joint Stock
Can any of the company-specific risk be diversified away by investing in both Bridgford Foods and Joint Stock 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 Joint Stock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgford Foods and Joint Stock, you can compare the effects of market volatilities on Bridgford Foods and Joint Stock 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 Joint Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgford Foods and Joint Stock.
Diversification Opportunities for Bridgford Foods and Joint Stock
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bridgford and Joint is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bridgford Foods and Joint Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joint Stock 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 Joint Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joint Stock has no effect on the direction of Bridgford Foods i.e., Bridgford Foods and Joint Stock go up and down completely randomly.
Pair Corralation between Bridgford Foods and Joint Stock
Given the investment horizon of 90 days Bridgford Foods is expected to under-perform the Joint Stock. But the stock apears to be less risky and, when comparing its historical volatility, Bridgford Foods is 1.12 times less risky than Joint Stock. The stock trades about -0.02 of its potential returns per unit of risk. The Joint Stock is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7,355 in Joint Stock on August 29, 2024 and sell it today you would earn a total of 3,607 from holding Joint Stock or generate 49.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 72.24% |
| Values | Daily Returns |
Bridgford Foods vs. Joint Stock
Performance |
| Timeline |
| Bridgford Foods |
| Joint Stock |
Bridgford Foods and Joint Stock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgford Foods and Joint Stock
The main advantage of trading using opposite Bridgford Foods and Joint Stock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgford Foods position performs unexpectedly, Joint Stock 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 Joint Stock will offset losses from the drop in Joint Stock'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 |
| Joint Stock vs. Treasury Wine Estates | Joint Stock vs. Oatly Group AB | Joint Stock vs. Vistra Energy Corp | Joint Stock vs. NRG Energy |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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