Correlation Between GEAR4MUSIC and SENECA FOODS
Can any of the company-specific risk be diversified away by investing in both GEAR4MUSIC 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 GEAR4MUSIC and SENECA FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEAR4MUSIC LS 10 and SENECA FOODS A, you can compare the effects of market volatilities on GEAR4MUSIC 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 GEAR4MUSIC with a short position of SENECA FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEAR4MUSIC and SENECA FOODS.
Diversification Opportunities for GEAR4MUSIC and SENECA FOODS
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GEAR4MUSIC and SENECA is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding GEAR4MUSIC LS 10 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 GEAR4MUSIC 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 GEAR4MUSIC LS 10 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 GEAR4MUSIC i.e., GEAR4MUSIC and SENECA FOODS go up and down completely randomly.
Pair Corralation between GEAR4MUSIC and SENECA FOODS
Assuming the 90 days horizon GEAR4MUSIC is expected to generate 1.29 times less return on investment than SENECA FOODS. In addition to that, GEAR4MUSIC is 1.02 times more volatile than SENECA FOODS A. It trades about 0.06 of its total potential returns per unit of risk. SENECA FOODS A is currently generating about 0.08 per unit of volatility. If you would invest 3,180 in SENECA FOODS A on September 12, 2024 and sell it today you would earn a total of 3,520 from holding SENECA FOODS A or generate 110.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GEAR4MUSIC LS 10 vs. SENECA FOODS A
Performance |
| Timeline |
| GEAR4MUSIC LS 10 |
| SENECA FOODS A |
GEAR4MUSIC and SENECA FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEAR4MUSIC and SENECA FOODS
The main advantage of trading using opposite GEAR4MUSIC and SENECA FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEAR4MUSIC 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.| GEAR4MUSIC vs. PARKEN Sport Entertainment | GEAR4MUSIC vs. LG Display Co | GEAR4MUSIC vs. JD SPORTS FASH | GEAR4MUSIC vs. PLAYTIKA HOLDING DL 01 |
| SENECA FOODS vs. Xenia Hotels Resorts | SENECA FOODS vs. COSTCO WHOLESALE CDR | SENECA FOODS vs. Hyatt Hotels | SENECA FOODS vs. Ross Stores |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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