Correlation Between BG Foods and Sow Good

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

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

Diversification Opportunities for BG Foods and Sow Good

0.78

Correlation Coefficient

BG Foods  Sow Good

Poor diversification

The 3 months correlation between BGS and Sow is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding BG Foods and Sow Good Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sow Good Common and BG Foods 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 BG Foods are associated (or correlated) with Sow Good. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sow Good Common has no effect on the direction of BG Foods i.e., BG Foods and Sow Good go up and down completely randomly.

Pair Corralation between BG Foods and Sow Good

Considering the 90-day investment horizon BG Foods is expected to generate 0.43 times more return on investment than Sow Good. However, BG Foods is 2.34 times less risky than Sow Good. It trades about -0.06 of its potential returns per unit of risk. Sow Good Common is currently generating about -0.16 per unit of risk. If you would invest  816.00  in BG Foods on September 4, 2024 and sell it today you would lose (129.00) from holding BG Foods or give up 15.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

BG Foods  vs.  Sow Good Common

BG Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BG 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 technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Sow Good Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sow Good Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with BG Foods and Sow Good

The main advantage of trading using opposite BG Foods and Sow Good positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BG Foods position performs unexpectedly, Sow Good 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 Sow Good will offset losses from the drop in Sow Good's long position.

The idea behind BG Foods and Sow Good Common 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.