Correlation Between Tootsie Roll and BG Foods
Can any of the company-specific risk be diversified away by investing in both Tootsie Roll and BG 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 Tootsie Roll and BG Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tootsie Roll Industries and BG Foods, you can compare the effects of market volatilities on Tootsie Roll and BG 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 Tootsie Roll with a short position of BG Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tootsie Roll and BG Foods.
Diversification Opportunities for Tootsie Roll and BG Foods
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tootsie and BGS is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Tootsie Roll Industries and BG Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BG Foods and Tootsie Roll 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 Tootsie Roll Industries are associated (or correlated) with BG Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BG Foods has no effect on the direction of Tootsie Roll i.e., Tootsie Roll and BG Foods go up and down completely randomly.
Pair Corralation between Tootsie Roll and BG Foods
Allowing for the 90-day total investment horizon Tootsie Roll Industries is expected to generate 0.42 times more return on investment than BG Foods. However, Tootsie Roll Industries is 2.37 times less risky than BG Foods. It trades about -0.04 of its potential returns per unit of risk. BG Foods is currently generating about -0.02 per unit of risk. If you would invest 4,141 in Tootsie Roll Industries on November 9, 2024 and sell it today you would lose (1,081) from holding Tootsie Roll Industries or give up 26.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tootsie Roll Industries vs. BG Foods
Performance |
| Timeline |
| Tootsie Roll Industries |
| BG Foods |
Tootsie Roll and BG Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tootsie Roll and BG Foods
The main advantage of trading using opposite Tootsie Roll and BG Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tootsie Roll position performs unexpectedly, BG 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 BG Foods will offset losses from the drop in BG Foods' long position.| Tootsie Roll vs. Mondelez International | Tootsie Roll vs. Hershey Co | Tootsie Roll vs. Rocky Mountain Chocolate | Tootsie Roll vs. Chocoladefabriken Lindt Sprngli |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |