Correlation Between BG Foods and ONWARD MEDICAL

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

By analyzing existing cross correlation between BG Foods and ONWARD MEDICAL BV, you can compare the effects of market volatilities on BG Foods and ONWARD MEDICAL 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 BG Foods with a short position of ONWARD MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of BG Foods and ONWARD MEDICAL.

Diversification Opportunities for BG Foods and ONWARD MEDICAL

-0.73

Correlation Coefficient

BG Foods  ONWARD MEDICAL

Pay attention - limited upside

The 3 months correlation between DHR and ONWARD is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding BG Foods and ONWARD MEDICAL BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONWARD MEDICAL BV and BG 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 BG Foods are associated (or correlated) with ONWARD MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONWARD MEDICAL BV has no effect on the direction of BG Foods i.e., BG Foods and ONWARD MEDICAL go up and down completely randomly.

Pair Corralation between BG Foods and ONWARD MEDICAL

Assuming the 90 days trading horizon BG Foods is expected to generate 5.71 times less return on investment than ONWARD MEDICAL. But when comparing it to its historical volatility, BG Foods is 1.63 times less risky than ONWARD MEDICAL. It trades about 0.01 of its potential returns per unit of risk. ONWARD MEDICAL BV is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  440.00  in ONWARD MEDICAL BV on December 19, 2024 and sell it today you would earn a total of  26.00  from holding ONWARD MEDICAL BV or generate 5.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

BG Foods  vs.  ONWARD MEDICAL BV

BG Foods

Risk-Adjusted Performance

Very Weak

Over the last 90 days BG Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, BG Foods is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

ONWARD MEDICAL BV

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ONWARD MEDICAL BV are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, ONWARD MEDICAL may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with BG Foods and ONWARD MEDICAL

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

The idea behind BG Foods and ONWARD MEDICAL BV 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.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.