Correlation Between LANC Old and Bridgford Foods

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

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

Diversification Opportunities for LANC Old and Bridgford Foods

0.2

Correlation Coefficient

LANC Old  Bridgford Foods

Modest diversification

The 3 months correlation between LANC and Bridgford is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding LANC Old and Bridgford Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgford Foods and LANC Old 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 LANC Old 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 LANC Old i.e., LANC Old and Bridgford Foods go up and down completely randomly.

Pair Corralation between LANC Old and Bridgford Foods

Given the investment horizon of 90 days LANC Old is expected to generate 0.63 times more return on investment than Bridgford Foods. However, LANC Old is 1.58 times less risky than Bridgford Foods. It trades about 0.12 of its potential returns per unit of risk. Bridgford Foods is currently generating about -0.01 per unit of risk. If you would invest  16,447  in LANC Old on May 8, 2025 and sell it today you would earn a total of  830.00  from holding LANC Old or generate 5.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	60.66%
Values	Daily Returns

LANC Old  vs.  Bridgford Foods

LANC Old

Risk-Adjusted Performance

Fair

Over the last 90 days LANC Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather uncertain basic indicators, LANC Old may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Bridgford Foods

Risk-Adjusted Performance

Weakest

Over the last 90 days Bridgford Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, Bridgford Foods is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with LANC Old and Bridgford Foods

The main advantage of trading using opposite LANC Old and Bridgford Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LANC Old 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 LANC Old 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.