Correlation Between ADRIATIC METALS and SENECA FOODS
Can any of the company-specific risk be diversified away by investing in both ADRIATIC METALS and SENECA 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 ADRIATIC METALS and SENECA FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADRIATIC METALS LS 013355 and SENECA FOODS A, you can compare the effects of market volatilities on ADRIATIC METALS and SENECA 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 ADRIATIC METALS with a short position of SENECA FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADRIATIC METALS and SENECA FOODS.
Diversification Opportunities for ADRIATIC METALS and SENECA FOODS
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ADRIATIC and SENECA is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding ADRIATIC METALS LS 013355 and SENECA FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENECA FOODS A and ADRIATIC METALS 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 ADRIATIC METALS LS 013355 are associated (or correlated) with SENECA FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENECA FOODS A has no effect on the direction of ADRIATIC METALS i.e., ADRIATIC METALS and SENECA FOODS go up and down completely randomly.
Pair Corralation between ADRIATIC METALS and SENECA FOODS
Assuming the 90 days trading horizon ADRIATIC METALS LS 013355 is expected to under-perform the SENECA FOODS. In addition to that, ADRIATIC METALS is 1.13 times more volatile than SENECA FOODS A. It trades about -0.07 of its total potential returns per unit of risk. SENECA FOODS A is currently generating about 0.27 per unit of volatility. If you would invest 5,650 in SENECA FOODS A on August 30, 2024 and sell it today you would earn a total of 950.00 from holding SENECA FOODS A or generate 16.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADRIATIC METALS LS 013355 vs. SENECA FOODS A
Performance |
| Timeline |
| ADRIATIC METALS LS |
| SENECA FOODS A |
ADRIATIC METALS and SENECA FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADRIATIC METALS and SENECA FOODS
The main advantage of trading using opposite ADRIATIC METALS and SENECA FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADRIATIC METALS position performs unexpectedly, SENECA 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 SENECA FOODS will offset losses from the drop in SENECA FOODS's long position.| ADRIATIC METALS vs. AEGEAN AIRLINES | ADRIATIC METALS vs. Costco Wholesale Corp | ADRIATIC METALS vs. Ross Stores | ADRIATIC METALS vs. Retail Estates NV |
| SENECA FOODS vs. REGAL ASIAN INVESTMENTS | SENECA FOODS vs. Chuangs China Investments | SENECA FOODS vs. Methode Electronics | SENECA FOODS vs. LPKF Laser Electronics |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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