Correlation Between Bridgford Foods and Old Dominion
Can any of the company-specific risk be diversified away by investing in both Bridgford Foods and Old Dominion 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 Old Dominion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgford Foods and Old Dominion Freight, you can compare the effects of market volatilities on Bridgford Foods and Old Dominion 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 Old Dominion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgford Foods and Old Dominion.
Diversification Opportunities for Bridgford Foods and Old Dominion
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bridgford and Old is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Bridgford Foods and Old Dominion Freight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Dominion Freight 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 Old Dominion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Dominion Freight has no effect on the direction of Bridgford Foods i.e., Bridgford Foods and Old Dominion go up and down completely randomly.
Pair Corralation between Bridgford Foods and Old Dominion
Given the investment horizon of 90 days Bridgford Foods is expected to generate 0.92 times more return on investment than Old Dominion. However, Bridgford Foods is 1.09 times less risky than Old Dominion. It trades about 0.14 of its potential returns per unit of risk. Old Dominion Freight is currently generating about -0.04 per unit of risk. If you would invest 892.00 in Bridgford Foods on November 1, 2024 and sell it today you would earn a total of 158.00 from holding Bridgford Foods or generate 17.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bridgford Foods vs. Old Dominion Freight
Performance |
| Timeline |
| Bridgford Foods |
| Old Dominion Freight |
Bridgford Foods and Old Dominion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgford Foods and Old Dominion
The main advantage of trading using opposite Bridgford Foods and Old Dominion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgford Foods position performs unexpectedly, Old Dominion 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 Old Dominion will offset losses from the drop in Old Dominion's long position.| Bridgford Foods vs. J J Snack | Bridgford Foods vs. Central Garden Pet | Bridgford Foods vs. Central Garden Pet | Bridgford Foods vs. Lancaster Colony |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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