Correlation Between Bridgford Foods and SunOpta

Can any of the company-specific risk be diversified away by investing in both Bridgford Foods and SunOpta 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 SunOpta into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bridgford Foods and SunOpta, you can compare the effects of market volatilities on Bridgford Foods and SunOpta 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 SunOpta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgford Foods and SunOpta.

Diversification Opportunities for Bridgford Foods and SunOpta

0.67

Correlation Coefficient

Bridgford Foods  SunOpta

Poor diversification

The 3 months correlation between Bridgford and SunOpta is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bridgford Foods and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta 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 SunOpta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunOpta has no effect on the direction of Bridgford Foods i.e., Bridgford Foods and SunOpta go up and down completely randomly.

Pair Corralation between Bridgford Foods and SunOpta

Given the investment horizon of 90 days Bridgford Foods is expected to generate 0.62 times more return on investment than SunOpta. However, Bridgford Foods is 1.61 times less risky than SunOpta. It trades about -0.23 of its potential returns per unit of risk. SunOpta is currently generating about -0.25 per unit of risk. If you would invest  1,076  in Bridgford Foods on December 30, 2024 and sell it today you would lose (246.00) from holding Bridgford Foods or give up 22.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Bridgford Foods  vs.  SunOpta

Bridgford Foods

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bridgford Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

SunOpta

Risk-Adjusted Performance

Very Weak

Over the last 90 days SunOpta has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Bridgford Foods and SunOpta

The main advantage of trading using opposite Bridgford Foods and SunOpta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgford Foods position performs unexpectedly, SunOpta 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 SunOpta will offset losses from the drop in SunOpta's long position.

The idea behind Bridgford Foods and SunOpta pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.