Correlation Between J J and Seneca Foods
Can any of the company-specific risk be diversified away by investing in both J J 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 J J and Seneca Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J J Snack and Seneca Foods Corp, you can compare the effects of market volatilities on J J 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 J J with a short position of Seneca Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of J J and Seneca Foods.
Diversification Opportunities for J J and Seneca Foods
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JJSF and Seneca is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding J J Snack 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 J J 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 J J Snack 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 J J i.e., J J and Seneca Foods go up and down completely randomly.
Pair Corralation between J J and Seneca Foods
Given the investment horizon of 90 days J J Snack is expected to under-perform the Seneca Foods. But the stock apears to be less risky and, when comparing its historical volatility, J J Snack is 109.54 times less risky than Seneca Foods. The stock trades about -0.14 of its potential returns per unit of risk. The Seneca Foods Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 6,090 in Seneca Foods Corp on November 2, 2024 and sell it today you would earn a total of 1,080 from holding Seneca Foods Corp or generate 17.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 44.66% |
| Values | Daily Returns |
J J Snack vs. Seneca Foods Corp
Performance |
| Timeline |
| J J Snack |
| Seneca Foods Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
J J and Seneca Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J J and Seneca Foods
The main advantage of trading using opposite J J and Seneca Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J J 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.The idea behind J J Snack and Seneca Foods Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Seneca Foods vs. Bridgford Foods | Seneca Foods vs. J J Snack | Seneca Foods vs. Central Garden Pet | Seneca Foods vs. Central Garden Pet |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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