Correlation Between Bit Origin and Bridgford Foods

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

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

Diversification Opportunities for Bit Origin and Bridgford Foods

-0.59

Correlation Coefficient

Bit Origin  Bridgford Foods

Excellent diversification

The 3 months correlation between Bit and Bridgford is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Bit Origin and Bridgford Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgford Foods and Bit Origin 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 Bit Origin 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 Bit Origin i.e., Bit Origin and Bridgford Foods go up and down completely randomly.

Pair Corralation between Bit Origin and Bridgford Foods

Given the investment horizon of 90 days Bit Origin is expected to generate 3.65 times more return on investment than Bridgford Foods. However, Bit Origin is 3.65 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 0.01 per unit of risk. If you would invest  510.00  in Bit Origin on September 22, 2024 and sell it today you would lose (419.00) from holding Bit Origin or give up 82.16% of portfolio value over 90 days.

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

Bit Origin  vs.  Bridgford Foods

Bit Origin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bit Origin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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.

Bridgford Foods

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bridgford Foods are ranked lower than 8 (%) 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 Bit Origin and Bridgford Foods

The main advantage of trading using opposite Bit Origin and Bridgford Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bit Origin 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 Bit Origin 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.