Correlation Between PICKN PAY and SENECA FOODS-A
Can any of the company-specific risk be diversified away by investing in both PICKN PAY 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 PICKN PAY 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 PICKN PAY STORES and SENECA FOODS A, you can compare the effects of market volatilities on PICKN PAY 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 PICKN PAY with a short position of SENECA FOODS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICKN PAY and SENECA FOODS-A.
Diversification Opportunities for PICKN PAY and SENECA FOODS-A
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PICKN and SENECA is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding PICKN PAY STORES 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 PICKN PAY 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 PICKN PAY STORES 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 PICKN PAY i.e., PICKN PAY and SENECA FOODS-A go up and down completely randomly.
Pair Corralation between PICKN PAY and SENECA FOODS-A
Assuming the 90 days trading horizon PICKN PAY STORES is expected to generate 0.91 times more return on investment than SENECA FOODS-A. However, PICKN PAY STORES is 1.1 times less risky than SENECA FOODS-A. It trades about 0.34 of its potential returns per unit of risk. SENECA FOODS A is currently generating about 0.28 per unit of risk. If you would invest 127.00 in PICKN PAY STORES on September 1, 2024 and sell it today you would earn a total of 25.00 from holding PICKN PAY STORES or generate 19.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PICKN PAY STORES vs. SENECA FOODS A
Performance |
| Timeline |
| PICKN PAY STORES |
| SENECA FOODS A |
PICKN PAY and SENECA FOODS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PICKN PAY and SENECA FOODS-A
The main advantage of trading using opposite PICKN PAY and SENECA FOODS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PICKN PAY 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.| PICKN PAY vs. AOYAMA TRADING | PICKN PAY vs. ON SEMICONDUCTOR | PICKN PAY vs. Taiwan Semiconductor Manufacturing | PICKN PAY vs. BE Semiconductor Industries |
| SENECA FOODS-A vs. SIVERS SEMICONDUCTORS AB | SENECA FOODS-A vs. Darden Restaurants | SENECA FOODS-A vs. Reliance Steel Aluminum | SENECA FOODS-A vs. Q2M Managementberatung AG |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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