Correlation Between Apple and SENECA FOODS-A
Can any of the company-specific risk be diversified away by investing in both Apple and SENECA FOODS-A 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 Apple and SENECA FOODS-A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and SENECA FOODS A, you can compare the effects of market volatilities on Apple and SENECA FOODS-A 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 Apple with a short position of SENECA FOODS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and SENECA FOODS-A.
Diversification Opportunities for Apple and SENECA FOODS-A
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Apple and SENECA is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc 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 Apple 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 Apple Inc are associated (or correlated) with SENECA FOODS-A. 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 Apple i.e., Apple and SENECA FOODS-A go up and down completely randomly.
Pair Corralation between Apple and SENECA FOODS-A
Assuming the 90 days trading horizon Apple Inc is expected to under-perform the SENECA FOODS-A. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 1.23 times less risky than SENECA FOODS-A. The stock trades about -0.5 of its potential returns per unit of risk. The SENECA FOODS A is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 7,100 in SENECA FOODS A on October 23, 2024 and sell it today you would lose (300.00) from holding SENECA FOODS A or give up 4.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. SENECA FOODS A
Performance |
| Timeline |
| Apple Inc |
| SENECA FOODS A |
Apple and SENECA FOODS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and SENECA FOODS-A
The main advantage of trading using opposite Apple and SENECA FOODS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, SENECA FOODS-A 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-A will offset losses from the drop in SENECA FOODS-A's long position.| Apple vs. AECOM TECHNOLOGY | Apple vs. DICKS Sporting Goods | Apple vs. Madison Square Garden | Apple vs. COLUMBIA SPORTSWEAR |
| SENECA FOODS-A vs. Apple Inc | SENECA FOODS-A vs. Apple Inc | SENECA FOODS-A vs. Apple Inc | SENECA FOODS-A vs. Apple Inc |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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