Correlation Between Marti Technologies and Bridgford Foods

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

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

Diversification Opportunities for Marti Technologies and Bridgford Foods

0.63

Correlation Coefficient

Marti Technologies  Bridgford Foods

Poor diversification

The 3 months correlation between Marti and Bridgford is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Marti Technologies and Bridgford Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgford Foods and Marti Technologies 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 Marti Technologies 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 Marti Technologies i.e., Marti Technologies and Bridgford Foods go up and down completely randomly.

Pair Corralation between Marti Technologies and Bridgford Foods

Considering the 90-day investment horizon Marti Technologies is expected to generate 2.75 times more return on investment than Bridgford Foods. However, Marti Technologies is 2.75 times more volatile than Bridgford Foods. It trades about 0.16 of its potential returns per unit of risk. Bridgford Foods is currently generating about 0.13 per unit of risk. If you would invest  198.00  in Marti Technologies on September 12, 2024 and sell it today you would earn a total of  117.00  from holding Marti Technologies or generate 59.09% return on investment over 90 days.

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

Marti Technologies  vs.  Bridgford Foods

Marti Technologies

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Marti Technologies are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Marti Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Bridgford Foods

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bridgford Foods are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile forward indicators, Bridgford Foods exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marti Technologies and Bridgford Foods

The main advantage of trading using opposite Marti Technologies and Bridgford Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marti Technologies 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 Marti Technologies 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.