Correlation Between Natures Sunshine and Seneca Foods
Can any of the company-specific risk be diversified away by investing in both Natures Sunshine 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 Natures Sunshine and Seneca Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natures Sunshine Products and Seneca Foods Corp, you can compare the effects of market volatilities on Natures Sunshine 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 Natures Sunshine with a short position of Seneca Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natures Sunshine and Seneca Foods.
Diversification Opportunities for Natures Sunshine and Seneca Foods
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Natures and Seneca is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Natures Sunshine Products 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 Natures Sunshine 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 Natures Sunshine Products 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 Natures Sunshine i.e., Natures Sunshine and Seneca Foods go up and down completely randomly.
Pair Corralation between Natures Sunshine and Seneca Foods
Given the investment horizon of 90 days Natures Sunshine is expected to generate 51.44 times less return on investment than Seneca Foods. But when comparing it to its historical volatility, Natures Sunshine Products is 33.15 times less risky than Seneca Foods. It trades about 0.06 of its potential returns per unit of risk. Seneca Foods Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 6,303 in Seneca Foods Corp on August 27, 2024 and sell it today you would earn a total of 823.00 from holding Seneca Foods Corp or generate 13.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 63.31% |
| Values | Daily Returns |
Natures Sunshine Products vs. Seneca Foods Corp
Performance |
| Timeline |
| Natures Sunshine Products |
| Seneca Foods Corp |
Natures Sunshine and Seneca Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natures Sunshine and Seneca Foods
The main advantage of trading using opposite Natures Sunshine and Seneca Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natures Sunshine 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.| Natures Sunshine vs. Seneca Foods Corp | Natures Sunshine vs. Central Garden Pet | Natures Sunshine vs. Central Garden Pet | Natures Sunshine vs. Associated British Foods |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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