Correlation Between BG Foods and Fevertree Drinks

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

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

Diversification Opportunities for BG Foods and Fevertree Drinks

-0.04

Correlation Coefficient

BG Foods  Fevertree Drinks

Good diversification

The 3 months correlation between BGS and Fevertree is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding BG Foods and Fevertree Drinks Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fevertree Drinks Plc and BG Foods 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 BG Foods are associated (or correlated) with Fevertree Drinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fevertree Drinks Plc has no effect on the direction of BG Foods i.e., BG Foods and Fevertree Drinks go up and down completely randomly.

Pair Corralation between BG Foods and Fevertree Drinks

Considering the 90-day investment horizon BG Foods is expected to generate 1.23 times more return on investment than Fevertree Drinks. However, BG Foods is 1.23 times more volatile than Fevertree Drinks Plc. It trades about 0.03 of its potential returns per unit of risk. Fevertree Drinks Plc is currently generating about 0.03 per unit of risk. If you would invest  441.00  in BG Foods on September 7, 2025 and sell it today you would earn a total of  12.00  from holding BG Foods or generate 2.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

BG Foods  vs.  Fevertree Drinks Plc

BG Foods

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BG Foods are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting technical and fundamental indicators, BG Foods may actually be approaching a critical reversion point that can send shares even higher in January 2026.

Fevertree Drinks Plc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fevertree Drinks Plc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Fevertree Drinks may actually be approaching a critical reversion point that can send shares even higher in January 2026.

Pair Trading with BG Foods and Fevertree Drinks

The main advantage of trading using opposite BG Foods and Fevertree Drinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BG Foods position performs unexpectedly, Fevertree Drinks 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 Fevertree Drinks will offset losses from the drop in Fevertree Drinks' long position.

The idea behind BG Foods and Fevertree Drinks Plc 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 the Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.