Correlation Between Bridgford Foods and Philip Morris
Can any of the company-specific risk be diversified away by investing in both Bridgford Foods and Philip Morris 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 Philip Morris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgford Foods and Philip Morris International, you can compare the effects of market volatilities on Bridgford Foods and Philip Morris 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 Philip Morris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgford Foods and Philip Morris.
Diversification Opportunities for Bridgford Foods and Philip Morris
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bridgford and Philip is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Bridgford Foods and Philip Morris International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Philip Morris Intern 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 Philip Morris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Philip Morris Intern has no effect on the direction of Bridgford Foods i.e., Bridgford Foods and Philip Morris go up and down completely randomly.
Pair Corralation between Bridgford Foods and Philip Morris
Given the investment horizon of 90 days Bridgford Foods is expected to under-perform the Philip Morris. In addition to that, Bridgford Foods is 2.18 times more volatile than Philip Morris International. It trades about -0.01 of its total potential returns per unit of risk. Philip Morris International is currently generating about 0.1 per unit of volatility. If you would invest 8,563 in Philip Morris International on September 4, 2024 and sell it today you would earn a total of 4,539 from holding Philip Morris International or generate 53.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.93% |
| Values | Daily Returns |
Bridgford Foods vs. Philip Morris International
Performance |
| Timeline |
| Bridgford Foods |
| Philip Morris Intern |
Bridgford Foods and Philip Morris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgford Foods and Philip Morris
The main advantage of trading using opposite Bridgford Foods and Philip Morris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgford Foods position performs unexpectedly, Philip Morris 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 Philip Morris will offset losses from the drop in Philip Morris' 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 |
| Philip Morris vs. British American Tobacco | Philip Morris vs. Universal | Philip Morris vs. Imperial Brands PLC | Philip Morris vs. Altria Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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