Correlation Between Bread Financial and Alphabet
Can any of the company-specific risk be diversified away by investing in both Bread Financial and Alphabet 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 Bread Financial and Alphabet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bread Financial Holdings and Alphabet, you can compare the effects of market volatilities on Bread Financial and Alphabet 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 Bread Financial with a short position of Alphabet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bread Financial and Alphabet.
Diversification Opportunities for Bread Financial and Alphabet
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bread and Alphabet is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Bread Financial Holdings and Alphabet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphabet and Bread Financial 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 Bread Financial Holdings are associated (or correlated) with Alphabet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphabet has no effect on the direction of Bread Financial i.e., Bread Financial and Alphabet go up and down completely randomly.
Pair Corralation between Bread Financial and Alphabet
Assuming the 90 days trading horizon Bread Financial is expected to generate 57.55 times less return on investment than Alphabet. In addition to that, Bread Financial is 1.73 times more volatile than Alphabet. It trades about 0.0 of its total potential returns per unit of risk. Alphabet is currently generating about 0.22 per unit of volatility. If you would invest 8,970 in Alphabet on July 26, 2025 and sell it today you would earn a total of 2,400 from holding Alphabet or generate 26.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bread Financial Holdings vs. Alphabet
Performance |
| Timeline |
| Bread Financial Holdings |
| Alphabet |
Bread Financial and Alphabet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bread Financial and Alphabet
The main advantage of trading using opposite Bread Financial and Alphabet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bread Financial position performs unexpectedly, Alphabet 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 Alphabet will offset losses from the drop in Alphabet's long position.| Bread Financial vs. MT Bank | Bread Financial vs. Rbr Top Offices | Bread Financial vs. Prudential Financial | Bread Financial vs. Jefferies Financial Group |
| Alphabet vs. Metalurgica Gerdau SA | Alphabet vs. Delta Air Lines | Alphabet vs. Pentair plc | Alphabet vs. Alaska Air Group, |
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 the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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