Correlation Between Premier Foods and Seneca Foods
Can any of the company-specific risk be diversified away by investing in both Premier Foods 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 Premier Foods and Seneca Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier Foods Plc and Seneca Foods Corp, you can compare the effects of market volatilities on Premier Foods 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 Premier Foods with a short position of Seneca Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Foods and Seneca Foods.
Diversification Opportunities for Premier Foods and Seneca Foods
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Premier and Seneca is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Premier Foods Plc 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 Premier Foods 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 Premier Foods Plc 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 Premier Foods i.e., Premier Foods and Seneca Foods go up and down completely randomly.
Pair Corralation between Premier Foods and Seneca Foods
Assuming the 90 days horizon Premier Foods is expected to generate 156.45 times less return on investment than Seneca Foods. But when comparing it to its historical volatility, Premier Foods Plc is 68.68 times less risky than Seneca Foods. It trades about 0.07 of its potential returns per unit of risk. Seneca Foods Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 5,283 in Seneca Foods Corp on September 1, 2024 and sell it today you would earn a total of 1,921 from holding Seneca Foods Corp or generate 36.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 66.01% |
| Values | Daily Returns |
Premier Foods Plc vs. Seneca Foods Corp
Performance |
| Timeline |
| Premier Foods Plc |
| Seneca Foods Corp |
Premier Foods and Seneca Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier Foods and Seneca Foods
The main advantage of trading using opposite Premier Foods and Seneca Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Foods 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.| Premier Foods vs. Torque Lifestyle Brands | Premier Foods vs. Naturally Splendid Enterprises | Premier Foods vs. Aryzta AG PK | Premier Foods vs. The A2 Milk |
| 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 Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |