Correlation Between 1 800 and Bridgford Foods

Can any of the company-specific risk be diversified away by investing in both 1 800 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 1 800 and Bridgford Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 1 800 FLOWERSCOM and Bridgford Foods, you can compare the effects of market volatilities on 1 800 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 1 800 with a short position of Bridgford Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1 800 and Bridgford Foods.

Diversification Opportunities for 1 800 and Bridgford Foods

-0.43

Correlation Coefficient

1 800  Bridgford Foods

Very good diversification

The 3 months correlation between FLWS and Bridgford is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding 1 800 FLOWERSCOM and Bridgford Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgford Foods and 1 800 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 1 800 FLOWERSCOM 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 1 800 i.e., 1 800 and Bridgford Foods go up and down completely randomly.

Pair Corralation between 1 800 and Bridgford Foods

Given the investment horizon of 90 days 1 800 FLOWERSCOM is expected to under-perform the Bridgford Foods. In addition to that, 1 800 is 2.05 times more volatile than Bridgford Foods. It trades about -0.16 of its total potential returns per unit of risk. Bridgford Foods is currently generating about 0.08 per unit of volatility. If you would invest  1,036  in Bridgford Foods on October 11, 2024 and sell it today you would earn a total of  28.00  from holding Bridgford Foods or generate 2.7% return on investment over 90 days.

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

1 800 FLOWERSCOM  vs.  Bridgford Foods

1 800 FLOWERSCOM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 1 800 FLOWERSCOM has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

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 1 800 and Bridgford Foods

The main advantage of trading using opposite 1 800 and Bridgford Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1 800 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 1 800 FLOWERSCOM 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.