Correlation Between WK Kellogg and Bridgford Foods
Can any of the company-specific risk be diversified away by investing in both WK Kellogg 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 WK Kellogg and Bridgford Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WK Kellogg Co and Bridgford Foods, you can compare the effects of market volatilities on WK Kellogg 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 WK Kellogg with a short position of Bridgford Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of WK Kellogg and Bridgford Foods.
Diversification Opportunities for WK Kellogg and Bridgford Foods
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KLG and Bridgford is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding WK Kellogg Co and Bridgford Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgford Foods and WK Kellogg 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 WK Kellogg Co 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 WK Kellogg i.e., WK Kellogg and Bridgford Foods go up and down completely randomly.
Pair Corralation between WK Kellogg and Bridgford Foods
Considering the 90-day investment horizon WK Kellogg Co is expected to under-perform the Bridgford Foods. In addition to that, WK Kellogg is 1.65 times more volatile than Bridgford Foods. It trades about -0.42 of its total potential returns per unit of risk. Bridgford Foods is currently generating about 0.11 per unit of volatility. If you would invest 1,028 in Bridgford Foods on October 12, 2024 and sell it today you would earn a total of 36.00 from holding Bridgford Foods or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WK Kellogg Co vs. Bridgford Foods
Performance |
| Timeline |
| WK Kellogg |
| Bridgford Foods |
WK Kellogg and Bridgford Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WK Kellogg and Bridgford Foods
The main advantage of trading using opposite WK Kellogg and Bridgford Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WK Kellogg 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.| WK Kellogg vs. Youdao Inc | WK Kellogg vs. Daily Journal Corp | WK Kellogg vs. Udemy Inc | WK Kellogg vs. Astral Foods Limited |
| Bridgford Foods vs. J J Snack | Bridgford Foods vs. Central Garden Pet | Bridgford Foods vs. Central Garden Pet | Bridgford Foods vs. Lancaster Colony |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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