Correlation Between Meiwu Technology and Bridgford Foods

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

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

Diversification Opportunities for Meiwu Technology and Bridgford Foods

0.57

Correlation Coefficient

Meiwu Technology  Bridgford Foods

Very weak diversification

The 3 months correlation between Meiwu and Bridgford is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Meiwu Technology Co and Bridgford Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgford Foods and Meiwu Technology 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 Meiwu Technology Co 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 Meiwu Technology i.e., Meiwu Technology and Bridgford Foods go up and down completely randomly.

Pair Corralation between Meiwu Technology and Bridgford Foods

Considering the 90-day investment horizon Meiwu Technology Co is expected to under-perform the Bridgford Foods. In addition to that, Meiwu Technology is 9.66 times more volatile than Bridgford Foods. It trades about -0.15 of its total potential returns per unit of risk. Bridgford Foods is currently generating about -0.13 per unit of volatility. If you would invest  1,060  in Bridgford Foods on December 26, 2024 and sell it today you would lose (132.00) from holding Bridgford Foods or give up 12.45% of portfolio value over 90 days.

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

Meiwu Technology Co  vs.  Bridgford Foods

Meiwu Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Meiwu Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated 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 Meiwu Technology and Bridgford Foods

The main advantage of trading using opposite Meiwu Technology and Bridgford Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiwu Technology 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 Meiwu Technology Co 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.