Correlation Between Ensign and SENECA FOODS-A
Can any of the company-specific risk be diversified away by investing in both Ensign 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 Ensign 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 The Ensign Group and SENECA FOODS A, you can compare the effects of market volatilities on Ensign 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 Ensign with a short position of SENECA FOODS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ensign and SENECA FOODS-A.
Diversification Opportunities for Ensign and SENECA FOODS-A
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ensign and SENECA is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding The Ensign Group 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 Ensign 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 The Ensign Group 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 Ensign i.e., Ensign and SENECA FOODS-A go up and down completely randomly.
Pair Corralation between Ensign and SENECA FOODS-A
Assuming the 90 days horizon The Ensign Group is expected to generate 0.76 times more return on investment than SENECA FOODS-A. However, The Ensign Group is 1.32 times less risky than SENECA FOODS-A. It trades about 0.18 of its potential returns per unit of risk. SENECA FOODS A is currently generating about -0.26 per unit of risk. If you would invest 12,700 in The Ensign Group on November 6, 2024 and sell it today you would earn a total of 600.00 from holding The Ensign Group or generate 4.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Ensign Group vs. SENECA FOODS A
Performance |
| Timeline |
| Ensign Group |
| SENECA FOODS A |
Ensign and SENECA FOODS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ensign and SENECA FOODS-A
The main advantage of trading using opposite Ensign and SENECA FOODS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ensign 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.| Ensign vs. EPSILON HEALTHCARE LTD | Ensign vs. Corsair Gaming | Ensign vs. RCI Hospitality Holdings | Ensign vs. SOGECLAIR SA INH |
| SENECA FOODS-A vs. DALATA HOTEL | SENECA FOODS-A vs. Siemens Healthineers AG | SENECA FOODS-A vs. HEALTHSTREAM | SENECA FOODS-A vs. INTERCONT HOTELS |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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