Correlation Between Bridgford Foods and Nomad Foods
Can any of the company-specific risk be diversified away by investing in both Bridgford Foods and Nomad Foods 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 Nomad Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgford Foods and Nomad Foods, you can compare the effects of market volatilities on Bridgford Foods and Nomad Foods 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 Nomad Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgford Foods and Nomad Foods.
Diversification Opportunities for Bridgford Foods and Nomad Foods
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bridgford and Nomad is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bridgford Foods and Nomad Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nomad Foods 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 Nomad Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nomad Foods has no effect on the direction of Bridgford Foods i.e., Bridgford Foods and Nomad Foods go up and down completely randomly.
Pair Corralation between Bridgford Foods and Nomad Foods
Given the investment horizon of 90 days Bridgford Foods is expected to under-perform the Nomad Foods. In addition to that, Bridgford Foods is 1.53 times more volatile than Nomad Foods. It trades about -0.01 of its total potential returns per unit of risk. Nomad Foods is currently generating about 0.01 per unit of volatility. If you would invest 1,701 in Nomad Foods on August 28, 2024 and sell it today you would earn a total of 68.00 from holding Nomad Foods or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Bridgford Foods vs. Nomad Foods
Performance |
| Timeline |
| Bridgford Foods |
| Nomad Foods |
Bridgford Foods and Nomad Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgford Foods and Nomad Foods
The main advantage of trading using opposite Bridgford Foods and Nomad Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgford Foods position performs unexpectedly, Nomad Foods 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 Nomad Foods will offset losses from the drop in Nomad Foods' 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 |
| Nomad Foods vs. Lancaster Colony | Nomad Foods vs. Treehouse Foods | Nomad Foods vs. John B Sanfilippo | Nomad Foods vs. Seneca Foods Corp |
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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