Correlation Between Lancaster Colony and Seneca Foods
Can any of the company-specific risk be diversified away by investing in both Lancaster Colony 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 Lancaster Colony and Seneca Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lancaster Colony and Seneca Foods Corp, you can compare the effects of market volatilities on Lancaster Colony 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 Lancaster Colony with a short position of Seneca Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lancaster Colony and Seneca Foods.
Diversification Opportunities for Lancaster Colony and Seneca Foods
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lancaster and Seneca is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Lancaster Colony 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 Lancaster Colony 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 Lancaster Colony 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 Lancaster Colony i.e., Lancaster Colony and Seneca Foods go up and down completely randomly.
Pair Corralation between Lancaster Colony and Seneca Foods
Given the investment horizon of 90 days Lancaster Colony is expected to generate 670.09 times less return on investment than Seneca Foods. But when comparing it to its historical volatility, Lancaster Colony is 90.82 times less risky than Seneca Foods. It trades about 0.02 of its potential returns per unit of risk. Seneca Foods Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 5,265 in Seneca Foods Corp on August 28, 2024 and sell it today you would earn a total of 2,105 from holding Seneca Foods Corp or generate 39.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 55.98% |
| Values | Daily Returns |
Lancaster Colony vs. Seneca Foods Corp
Performance |
| Timeline |
| Lancaster Colony |
| Seneca Foods Corp |
Lancaster Colony and Seneca Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lancaster Colony and Seneca Foods
The main advantage of trading using opposite Lancaster Colony and Seneca Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lancaster Colony 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.| Lancaster Colony vs. Treehouse Foods | Lancaster Colony vs. John B Sanfilippo | Lancaster Colony vs. Seneca Foods Corp | Lancaster Colony vs. Seneca Foods Corp |
| 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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