Correlation Between Bridgford Foods and BG Foods
Can any of the company-specific risk be diversified away by investing in both Bridgford Foods 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 Bridgford Foods and BG Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgford Foods and BG Foods, you can compare the effects of market volatilities on Bridgford Foods 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 Bridgford Foods with a short position of BG Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgford Foods and BG Foods.
Diversification Opportunities for Bridgford Foods and BG Foods
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bridgford and BGS is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bridgford Foods and BG Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BG Foods and Bridgford Foods 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 Bridgford Foods 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 Bridgford Foods i.e., Bridgford Foods and BG Foods go up and down completely randomly.
Pair Corralation between Bridgford Foods and BG Foods
Given the investment horizon of 90 days Bridgford Foods is expected to under-perform the BG Foods. But the stock apears to be less risky and, when comparing its historical volatility, Bridgford Foods is 1.3 times less risky than BG Foods. The stock trades about -0.26 of its potential returns per unit of risk. The BG Foods is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,083 in BG Foods on January 20, 2024 and sell it today you would lose (10.00) from holding BG Foods or give up 0.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bridgford Foods vs. BG Foods
Performance |
| Timeline |
| Bridgford Foods |
| BG Foods |
Bridgford Foods and BG Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgford Foods and BG Foods
The main advantage of trading using opposite Bridgford Foods and BG Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgford Foods 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.| Bridgford Foods vs. Green Globe International | Bridgford Foods vs. Greenlane Holdings | Bridgford Foods vs. 22nd Century Group | Bridgford Foods vs. 1606 Corp |
| BG Foods vs. Green Globe International | BG Foods vs. Greenlane Holdings | BG Foods vs. 22nd Century Group | BG Foods vs. 1606 Corp |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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