Correlation Between Integral and Bridgford Foods

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

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

Diversification Opportunities for Integral and Bridgford Foods

-0.68

Correlation Coefficient

Integral  Bridgford Foods

Excellent diversification

The 3 months correlation between Integral and Bridgford is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science and Bridgford Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgford Foods and Integral 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 Integral Ad Science 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 Integral i.e., Integral and Bridgford Foods go up and down completely randomly.

Pair Corralation between Integral and Bridgford Foods

Considering the 90-day investment horizon Integral Ad Science is expected to generate 1.43 times more return on investment than Bridgford Foods. However, Integral is 1.43 times more volatile than Bridgford Foods. It trades about 0.01 of its potential returns per unit of risk. Bridgford Foods is currently generating about 0.0 per unit of risk. If you would invest  1,156  in Integral Ad Science on October 25, 2024 and sell it today you would lose (140.00) from holding Integral Ad Science or give up 12.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.19%
Values	Daily Returns

Integral Ad Science  vs.  Bridgford Foods

Integral Ad Science

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integral Ad Science has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak 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 Integral and Bridgford Foods

The main advantage of trading using opposite Integral and Bridgford Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integral 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 Integral Ad Science 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.