Correlation Between METTLER TOLEDO and SENECA FOODS-A
Can any of the company-specific risk be diversified away by investing in both METTLER TOLEDO 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 METTLER TOLEDO 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 METTLER TOLEDO INTL and SENECA FOODS A, you can compare the effects of market volatilities on METTLER TOLEDO 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 METTLER TOLEDO with a short position of SENECA FOODS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of METTLER TOLEDO and SENECA FOODS-A.
Diversification Opportunities for METTLER TOLEDO and SENECA FOODS-A
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between METTLER and SENECA is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding METTLER TOLEDO INTL 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 METTLER TOLEDO 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 METTLER TOLEDO INTL 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 METTLER TOLEDO i.e., METTLER TOLEDO and SENECA FOODS-A go up and down completely randomly.
Pair Corralation between METTLER TOLEDO and SENECA FOODS-A
Assuming the 90 days trading horizon METTLER TOLEDO INTL is expected to under-perform the SENECA FOODS-A. But the stock apears to be less risky and, when comparing its historical volatility, METTLER TOLEDO INTL is 1.45 times less risky than SENECA FOODS-A. The stock trades about -0.08 of its potential returns per unit of risk. The SENECA FOODS A is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 5,150 in SENECA FOODS A on August 28, 2024 and sell it today you would earn a total of 1,600 from holding SENECA FOODS A or generate 31.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
METTLER TOLEDO INTL vs. SENECA FOODS A
Performance |
| Timeline |
| METTLER TOLEDO INTL |
| SENECA FOODS A |
METTLER TOLEDO and SENECA FOODS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with METTLER TOLEDO and SENECA FOODS-A
The main advantage of trading using opposite METTLER TOLEDO and SENECA FOODS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METTLER TOLEDO 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.| METTLER TOLEDO vs. Apple Inc | METTLER TOLEDO vs. Apple Inc | METTLER TOLEDO vs. Apple Inc | METTLER TOLEDO vs. Microsoft |
| SENECA FOODS-A vs. Apple Inc | SENECA FOODS-A vs. Apple Inc | SENECA FOODS-A vs. Apple Inc | SENECA FOODS-A vs. Microsoft |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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