Correlation Between Better Choice and BG Foods

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Better Choice and BG 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 Better Choice and BG Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Better Choice and BG Foods Holdings, you can compare the effects of market volatilities on Better Choice and BG 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 Better Choice with a short position of BG Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Better Choice and BG Foods.

Diversification Opportunities for Better Choice and BG Foods

-0.49
  Correlation Coefficient

Very good diversification

The 3 months correlation between Better and BG Foods is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Better Choice and BG Foods Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BG Foods Holdings and Better Choice 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 Better Choice are associated (or correlated) with BG Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BG Foods Holdings has no effect on the direction of Better Choice i.e., Better Choice and BG Foods go up and down completely randomly.

Pair Corralation between Better Choice and BG Foods

Given the investment horizon of 90 days Better Choice is expected to generate 2.9 times more return on investment than BG Foods. However, Better Choice is 2.9 times more volatile than BG Foods Holdings. It trades about 0.2 of its potential returns per unit of risk. BG Foods Holdings is currently generating about 0.08 per unit of risk. If you would invest  190.00  in Better Choice on May 10, 2022 and sell it today you would earn a total of  53.00  from holding Better Choice or generate 27.89% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Better Choice  vs.  BG Foods Holdings

 Performance (%) 
       Timeline  
Better Choice 
Better Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Better Choice are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Better Choice reported solid returns over the last few months and may actually be approaching a breakup point.

Better Price Channel

BG Foods Holdings 
BG Foods Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in BG Foods Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, BG Foods is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

BG Foods Price Channel

Better Choice and BG Foods Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Better Choice and BG Foods

The main advantage of trading using opposite Better Choice and BG Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Better Choice position performs unexpectedly, BG 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 BG Foods will offset losses from the drop in BG Foods' long position.
The idea behind Better Choice and BG Foods Holdings 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.
Check out your portfolio center. 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

Other Complementary Tools

Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Go
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go
Global Correlations
Find global opportunities by holding instruments from different markets
Go
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Go
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go