Correlation Between Emerson Radio and Bridgford Foods
Can any of the company-specific risk be diversified away by investing in both Emerson Radio 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 Emerson Radio and Bridgford Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerson Radio and Bridgford Foods, you can compare the effects of market volatilities on Emerson Radio 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 Emerson Radio with a short position of Bridgford Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Radio and Bridgford Foods.
Diversification Opportunities for Emerson Radio and Bridgford Foods
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Emerson and Bridgford is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Radio and Bridgford Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgford Foods and Emerson Radio 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 Emerson Radio 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 Emerson Radio i.e., Emerson Radio and Bridgford Foods go up and down completely randomly.
Pair Corralation between Emerson Radio and Bridgford Foods
Considering the 90-day investment horizon Emerson Radio is expected to under-perform the Bridgford Foods. In addition to that, Emerson Radio is 1.49 times more volatile than Bridgford Foods. It trades about -0.26 of its total potential returns per unit of risk. Bridgford Foods is currently generating about 0.07 per unit of volatility. If you would invest 899.00 in Bridgford Foods on August 26, 2024 and sell it today you would earn a total of 24.00 from holding Bridgford Foods or generate 2.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerson Radio vs. Bridgford Foods
Performance |
| Timeline |
| Emerson Radio |
| Bridgford Foods |
Emerson Radio and Bridgford Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerson Radio and Bridgford Foods
The main advantage of trading using opposite Emerson Radio and Bridgford Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerson Radio 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.| Emerson Radio vs. VOXX International | Emerson Radio vs. LG Display Co | Emerson Radio vs. Vizio Holding Corp | Emerson Radio vs. Wearable Devices |
| Bridgford Foods vs. Bellring Brands LLC | Bridgford Foods vs. Ingredion Incorporated | Bridgford Foods vs. Nomad Foods | Bridgford Foods vs. Post Holdings |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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