Correlation Between JM Smucker and Bridgford Foods
Can any of the company-specific risk be diversified away by investing in both JM Smucker 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 JM Smucker and Bridgford Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JM Smucker and Bridgford Foods, you can compare the effects of market volatilities on JM Smucker 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 JM Smucker with a short position of Bridgford Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of JM Smucker and Bridgford Foods.
Diversification Opportunities for JM Smucker and Bridgford Foods
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between SJM and Bridgford is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding JM Smucker and Bridgford Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgford Foods and JM Smucker 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 JM Smucker 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 JM Smucker i.e., JM Smucker and Bridgford Foods go up and down completely randomly.
Pair Corralation between JM Smucker and Bridgford Foods
Considering the 90-day investment horizon JM Smucker is expected to generate 0.38 times more return on investment than Bridgford Foods. However, JM Smucker is 2.64 times less risky than Bridgford Foods. It trades about 0.04 of its potential returns per unit of risk. Bridgford Foods is currently generating about 0.0 per unit of risk. If you would invest 10,645 in JM Smucker on August 25, 2024 and sell it today you would earn a total of 685.00 from holding JM Smucker or generate 6.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.64% |
| Values | Daily Returns |
JM Smucker vs. Bridgford Foods
Performance |
| Timeline |
| JM Smucker |
| Bridgford Foods |
JM Smucker and Bridgford Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JM Smucker and Bridgford Foods
The main advantage of trading using opposite JM Smucker and Bridgford Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JM Smucker 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.| JM Smucker vs. Bellring Brands LLC | JM Smucker vs. Ingredion Incorporated | JM Smucker vs. John B Sanfilippo | JM Smucker vs. Nomad Foods |
| Bridgford Foods vs. Bellring Brands LLC | Bridgford Foods vs. Ingredion Incorporated | Bridgford Foods vs. JM Smucker | Bridgford Foods vs. John B Sanfilippo |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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