Correlation Between Kaival Brands and Bridgford Foods

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

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

Diversification Opportunities for Kaival Brands and Bridgford Foods

0.38

Correlation Coefficient

Kaival Brands  Bridgford Foods

Weak diversification

The 3 months correlation between Kaival and Bridgford is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Kaival Brands Innovations and Bridgford Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgford Foods and Kaival Brands 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 Kaival Brands Innovations 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 Kaival Brands i.e., Kaival Brands and Bridgford Foods go up and down completely randomly.

Pair Corralation between Kaival Brands and Bridgford Foods

Given the investment horizon of 90 days Kaival Brands Innovations is expected to under-perform the Bridgford Foods. In addition to that, Kaival Brands is 4.09 times more volatile than Bridgford Foods. It trades about -0.12 of its total potential returns per unit of risk. Bridgford Foods is currently generating about -0.21 per unit of volatility. If you would invest  1,076  in Bridgford Foods on December 29, 2024 and sell it today you would lose (225.00) from holding Bridgford Foods or give up 20.91% of portfolio value over 90 days.

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

Kaival Brands Innovations  vs.  Bridgford Foods

Kaival Brands Innovations

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kaival Brands Innovations has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

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 Kaival Brands and Bridgford Foods

The main advantage of trading using opposite Kaival Brands and Bridgford Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaival Brands 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 Kaival Brands Innovations 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.