Correlation Between National Vision and Bridgford Foods

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

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

Diversification Opportunities for National Vision and Bridgford Foods

-0.72

Correlation Coefficient

National Vision  Bridgford Foods

Pay attention - limited upside

The 3 months correlation between National and Bridgford is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding National Vision Holdings and Bridgford Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgford Foods and National Vision 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 National Vision Holdings 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 National Vision i.e., National Vision and Bridgford Foods go up and down completely randomly.

Pair Corralation between National Vision and Bridgford Foods

Considering the 90-day investment horizon National Vision Holdings is expected to generate 1.64 times more return on investment than Bridgford Foods. However, National Vision is 1.64 times more volatile than Bridgford Foods. It trades about 0.17 of its potential returns per unit of risk. Bridgford Foods is currently generating about -0.21 per unit of risk. If you would invest  1,010  in National Vision Holdings on December 29, 2024 and sell it today you would earn a total of  316.00  from holding National Vision Holdings or generate 31.29% return on investment over 90 days.

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

National Vision Holdings  vs.  Bridgford Foods

National Vision Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in National Vision Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, National Vision exhibited solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with National Vision and Bridgford Foods

The main advantage of trading using opposite National Vision and Bridgford Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Vision 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 National Vision Holdings 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.