Correlation Between Software Acquisition and BG Foods
Can any of the company-specific risk be diversified away by investing in both Software Acquisition 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 Software Acquisition and BG Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Software Acquisition Group and BG Foods, you can compare the effects of market volatilities on Software Acquisition 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 Software Acquisition with a short position of BG Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Software Acquisition and BG Foods.
Diversification Opportunities for Software Acquisition and BG Foods
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Software and BGS is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Software Acquisition Group and BG Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BG Foods and Software Acquisition 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 Software Acquisition Group 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 has no effect on the direction of Software Acquisition i.e., Software Acquisition and BG Foods go up and down completely randomly.
Pair Corralation between Software Acquisition and BG Foods
Given the investment horizon of 90 days Software Acquisition Group is expected to generate 1.99 times more return on investment than BG Foods. However, Software Acquisition is 1.99 times more volatile than BG Foods. It trades about 0.05 of its potential returns per unit of risk. BG Foods is currently generating about 0.03 per unit of risk. If you would invest 192.00 in Software Acquisition Group on September 7, 2025 and sell it today you would earn a total of 11.00 from holding Software Acquisition Group or generate 5.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Software Acquisition Group vs. BG Foods
Performance |
| Timeline |
| Software Acquisition |
| BG Foods |
Software Acquisition and BG Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Software Acquisition and BG Foods
The main advantage of trading using opposite Software Acquisition and BG Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Software Acquisition 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.| Software Acquisition vs. CyberArk Software | Software Acquisition vs. United Airlines Holdings | Software Acquisition vs. Magic Software Enterprises | Software Acquisition vs. Sun Country Airlines |
| BG Foods vs. Kellanova | BG Foods vs. Lamb Weston Holdings | BG Foods vs. Guangdong Guanghong Holdings | BG Foods vs. Tootsie Roll Industries |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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