Correlation Between J J and Bridgford Foods
Can any of the company-specific risk be diversified away by investing in both J J and Bridgford 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 J J and Bridgford Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J J Snack and Bridgford Foods, you can compare the effects of market volatilities on J J and Bridgford 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 J J with a short position of Bridgford Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of J J and Bridgford Foods.
Diversification Opportunities for J J and Bridgford Foods
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between JJSF and Bridgford is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding J J Snack and Bridgford Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgford Foods and J J 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 J J Snack are associated (or correlated) with Bridgford Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgford Foods has no effect on the direction of J J i.e., J J and Bridgford Foods go up and down completely randomly.
Pair Corralation between J J and Bridgford Foods
Given the investment horizon of 90 days J J Snack is expected to generate 0.61 times more return on investment than Bridgford Foods. However, J J Snack is 1.63 times less risky than Bridgford Foods. It trades about 0.02 of its potential returns per unit of risk. Bridgford Foods is currently generating about -0.01 per unit of risk. If you would invest 15,236 in J J Snack on August 27, 2024 and sell it today you would earn a total of 1,880 from holding J J Snack or generate 12.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
J J Snack vs. Bridgford Foods
Performance |
| Timeline |
| J J Snack |
| Bridgford Foods |
J J and Bridgford Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J J and Bridgford Foods
The main advantage of trading using opposite J J and Bridgford Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J J position performs unexpectedly, Bridgford 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 Bridgford Foods will offset losses from the drop in Bridgford Foods' long position.The idea behind J J Snack and Bridgford Foods pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Bridgford Foods vs. Seneca Foods Corp | Bridgford Foods vs. J J Snack | Bridgford Foods vs. Central Garden Pet | Bridgford Foods vs. Central Garden Pet |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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