Correlation Between Vale SA and SENECA FOODS-A
Can any of the company-specific risk be diversified away by investing in both Vale SA 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 Vale SA 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 Vale SA and SENECA FOODS A, you can compare the effects of market volatilities on Vale SA 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 Vale SA with a short position of SENECA FOODS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vale SA and SENECA FOODS-A.
Diversification Opportunities for Vale SA and SENECA FOODS-A
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vale and SENECA is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Vale SA 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 Vale SA 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 Vale SA 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 Vale SA i.e., Vale SA and SENECA FOODS-A go up and down completely randomly.
Pair Corralation between Vale SA and SENECA FOODS-A
Assuming the 90 days trading horizon Vale SA is expected to generate 0.78 times more return on investment than SENECA FOODS-A. However, Vale SA is 1.29 times less risky than SENECA FOODS-A. It trades about 0.04 of its potential returns per unit of risk. SENECA FOODS A is currently generating about 0.03 per unit of risk. If you would invest 664.00 in Vale SA on September 5, 2024 and sell it today you would earn a total of 285.00 from holding Vale SA or generate 42.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vale SA vs. SENECA FOODS A
Performance |
| Timeline |
| Vale SA |
| SENECA FOODS A |
Vale SA and SENECA FOODS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vale SA and SENECA FOODS-A
The main advantage of trading using opposite Vale SA and SENECA FOODS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vale SA 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.| Vale SA vs. SENECA FOODS A | Vale SA vs. CN MODERN DAIRY | Vale SA vs. Pentair plc | Vale SA vs. Westinghouse Air Brake |
| SENECA FOODS-A vs. TOTAL GABON | SENECA FOODS-A vs. Walgreens Boots Alliance | SENECA FOODS-A vs. Peak Resources Limited |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |