Correlation Between Bridgford Foods and Farmmi
Can any of the company-specific risk be diversified away by investing in both Bridgford Foods and Farmmi 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 Farmmi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgford Foods and Farmmi Inc, you can compare the effects of market volatilities on Bridgford Foods and Farmmi 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 Farmmi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgford Foods and Farmmi.
Diversification Opportunities for Bridgford Foods and Farmmi
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bridgford and Farmmi is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Bridgford Foods and Farmmi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmmi Inc 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 Farmmi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmmi Inc has no effect on the direction of Bridgford Foods i.e., Bridgford Foods and Farmmi go up and down completely randomly.
Pair Corralation between Bridgford Foods and Farmmi
Given the investment horizon of 90 days Bridgford Foods is expected to generate 0.51 times more return on investment than Farmmi. However, Bridgford Foods is 1.97 times less risky than Farmmi. It trades about 0.0 of its potential returns per unit of risk. Farmmi Inc is currently generating about -0.11 per unit of risk. If you would invest 1,307 in Bridgford Foods on January 17, 2024 and sell it today you would lose (232.00) from holding Bridgford Foods or give up 17.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bridgford Foods vs. Farmmi Inc
Performance |
| Timeline |
| Bridgford Foods |
| Farmmi Inc |
Bridgford Foods and Farmmi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgford Foods and Farmmi
The main advantage of trading using opposite Bridgford Foods and Farmmi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgford Foods position performs unexpectedly, Farmmi 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 Farmmi will offset losses from the drop in Farmmi's long position.| Bridgford Foods vs. Seneca Foods Corp | Bridgford Foods vs. Central Garden Pet | Bridgford Foods vs. Central Garden Pet | Bridgford Foods vs. Aryzta AG PK |
| Farmmi vs. Seneca Foods Corp | Farmmi vs. Central Garden Pet | Farmmi vs. Central Garden Pet | Farmmi vs. Aryzta AG PK |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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