Correlation Between Denison Mines and Bridgford Foods

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

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

Diversification Opportunities for Denison Mines and Bridgford Foods

-0.28

Correlation Coefficient

Denison Mines  Bridgford Foods

Very good diversification

The 3 months correlation between Denison and Bridgford is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Denison Mines Corp and Bridgford Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgford Foods and Denison Mines 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 Denison Mines Corp are associated (or correlated) with Bridgford Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgford Foods has no effect on the direction of Denison Mines i.e., Denison Mines and Bridgford Foods go up and down completely randomly.

Pair Corralation between Denison Mines and Bridgford Foods

Considering the 90-day investment horizon Denison Mines is expected to generate 3.17 times less return on investment than Bridgford Foods. In addition to that, Denison Mines is 1.87 times more volatile than Bridgford Foods. It trades about 0.04 of its total potential returns per unit of risk. Bridgford Foods is currently generating about 0.22 per unit of volatility. If you would invest  905.00  in Bridgford Foods on October 7, 2024 and sell it today you would earn a total of  175.00  from holding Bridgford Foods or generate 19.34% return on investment over 90 days.

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

Denison Mines Corp  vs.  Bridgford Foods

Denison Mines Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Denison Mines Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Denison Mines displayed solid returns over the last few months and may actually be approaching a breakup point.

Bridgford Foods

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bridgford Foods are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward indicators, Bridgford Foods exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Denison Mines and Bridgford Foods

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

The idea behind Denison Mines Corp and Bridgford Foods 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.