Correlation Between Fresh Del and BG Foods
Can any of the company-specific risk be diversified away by investing in both Fresh Del and BG 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 Fresh Del and BG Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fresh Del Monte and BG Foods, you can compare the effects of market volatilities on Fresh Del and BG 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 Fresh Del with a short position of BG Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresh Del and BG Foods.
Diversification Opportunities for Fresh Del and BG Foods
Pay attention - limited upside
The 3 months correlation between Fresh and BGS is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Fresh Del Monte and BG Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BG Foods and Fresh Del 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 Fresh Del Monte are associated (or correlated) with BG Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BG Foods has no effect on the direction of Fresh Del i.e., Fresh Del and BG Foods go up and down completely randomly.
Pair Corralation between Fresh Del and BG Foods
Considering the 90-day investment horizon Fresh Del Monte is expected to generate 0.52 times more return on investment than BG Foods. However, Fresh Del Monte is 1.94 times less risky than BG Foods. It trades about 0.29 of its potential returns per unit of risk. BG Foods is currently generating about -0.2 per unit of risk. If you would invest 2,876 in Fresh Del Monte on August 24, 2024 and sell it today you would earn a total of 484.00 from holding Fresh Del Monte or generate 16.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresh Del Monte vs. BG Foods
Performance |
| Timeline |
| Fresh Del Monte |
| BG Foods |
Fresh Del and BG Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresh Del and BG Foods
The main advantage of trading using opposite Fresh Del and BG Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresh Del position performs unexpectedly, BG 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 BG Foods will offset losses from the drop in BG Foods' long position.| Fresh Del vs. Limoneira Co | Fresh Del vs. Alico Inc | Fresh Del vs. Adecoagro SA | Fresh Del vs. Cal Maine Foods |
| BG Foods vs. Better Choice | BG Foods vs. BioAdaptives | BG Foods vs. Beyond Oil | BG Foods vs. Bon Natural Life |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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