Correlation Between John B and Seneca Foods
Can any of the company-specific risk be diversified away by investing in both John B 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 John B and Seneca Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John B Sanfilippo and Seneca Foods Corp, you can compare the effects of market volatilities on John B 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 John B with a short position of Seneca Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of John B and Seneca Foods.
Diversification Opportunities for John B and Seneca Foods
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between John and Seneca is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding John B Sanfilippo and Seneca Foods Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seneca Foods Corp and John B 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 John B Sanfilippo 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 Corp has no effect on the direction of John B i.e., John B and Seneca Foods go up and down completely randomly.
Pair Corralation between John B and Seneca Foods
Given the investment horizon of 90 days John B Sanfilippo is expected to under-perform the Seneca Foods. In addition to that, John B is 1.13 times more volatile than Seneca Foods Corp. It trades about -0.17 of its total potential returns per unit of risk. Seneca Foods Corp is currently generating about 0.3 per unit of volatility. If you would invest 6,195 in Seneca Foods Corp on August 24, 2024 and sell it today you would earn a total of 1,002 from holding Seneca Foods Corp or generate 16.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John B Sanfilippo vs. Seneca Foods Corp
Performance |
| Timeline |
| John B Sanfilippo |
| Seneca Foods Corp |
John B and Seneca Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John B and Seneca Foods
The main advantage of trading using opposite John B and Seneca Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John B 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' long position.| John B vs. Bellring Brands LLC | John B vs. Treehouse Foods | John B vs. Ingredion Incorporated | John B vs. JM Smucker |
| Seneca Foods vs. Bellring Brands LLC | Seneca Foods vs. Treehouse Foods | Seneca Foods vs. Ingredion Incorporated | Seneca Foods vs. JM Smucker |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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