Correlation Between Bridgford Foods and Proficient Auto
Can any of the company-specific risk be diversified away by investing in both Bridgford Foods and Proficient Auto 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 Proficient Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgford Foods and Proficient Auto Logistics,, you can compare the effects of market volatilities on Bridgford Foods and Proficient Auto 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 Proficient Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgford Foods and Proficient Auto.
Diversification Opportunities for Bridgford Foods and Proficient Auto
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bridgford and Proficient is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Bridgford Foods and Proficient Auto Logistics, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proficient Auto Logi 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 Proficient Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proficient Auto Logi has no effect on the direction of Bridgford Foods i.e., Bridgford Foods and Proficient Auto go up and down completely randomly.
Pair Corralation between Bridgford Foods and Proficient Auto
Given the investment horizon of 90 days Bridgford Foods is expected to generate 5.64 times less return on investment than Proficient Auto. But when comparing it to its historical volatility, Bridgford Foods is 1.65 times less risky than Proficient Auto. It trades about 0.07 of its potential returns per unit of risk. Proficient Auto Logistics, is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 836.00 in Proficient Auto Logistics, on August 26, 2024 and sell it today you would earn a total of 144.00 from holding Proficient Auto Logistics, or generate 17.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bridgford Foods vs. Proficient Auto Logistics,
Performance |
| Timeline |
| Bridgford Foods |
| Proficient Auto Logi |
Bridgford Foods and Proficient Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgford Foods and Proficient Auto
The main advantage of trading using opposite Bridgford Foods and Proficient Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgford Foods position performs unexpectedly, Proficient Auto 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 Proficient Auto will offset losses from the drop in Proficient Auto's long position.| Bridgford Foods vs. Bellring Brands LLC | Bridgford Foods vs. Ingredion Incorporated | Bridgford Foods vs. Nomad Foods | Bridgford Foods vs. Post Holdings |
| Proficient Auto vs. Sweetgreen | Proficient Auto vs. Chipotle Mexican Grill | Proficient Auto vs. Biglari Holdings | Proficient Auto vs. RadNet Inc |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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