Correlation Between Old Dominion and Bridgford Foods
Can any of the company-specific risk be diversified away by investing in both Old Dominion 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 Old Dominion and Bridgford Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Dominion Freight and Bridgford Foods, you can compare the effects of market volatilities on Old Dominion 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 Old Dominion with a short position of Bridgford Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Dominion and Bridgford Foods.
Diversification Opportunities for Old Dominion and Bridgford Foods
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Old and Bridgford is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Old Dominion Freight and Bridgford Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgford Foods and Old Dominion 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 Old Dominion Freight 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 Old Dominion i.e., Old Dominion and Bridgford Foods go up and down completely randomly.
Pair Corralation between Old Dominion and Bridgford Foods
Given the investment horizon of 90 days Old Dominion Freight is expected to under-perform the Bridgford Foods. But the stock apears to be less risky and, when comparing its historical volatility, Old Dominion Freight is 1.14 times less risky than Bridgford Foods. The stock trades about -0.02 of its potential returns per unit of risk. The Bridgford Foods is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 897.00 in Bridgford Foods on November 18, 2024 and sell it today you would earn a total of 134.00 from holding Bridgford Foods or generate 14.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Dominion Freight vs. Bridgford Foods
Performance |
| Timeline |
| Old Dominion Freight |
| Bridgford Foods |
Old Dominion and Bridgford Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Dominion and Bridgford Foods
The main advantage of trading using opposite Old Dominion and Bridgford Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Dominion 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.| Old Dominion vs. ArcBest Corp | Old Dominion vs. Marten Transport | Old Dominion vs. Werner Enterprises | Old Dominion vs. Knight Transportation |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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