Correlation Between Real Good and Seneca Foods
Can any of the company-specific risk be diversified away by investing in both Real Good 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 Real Good and Seneca Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Real Good Food and Seneca Foods Corp, you can compare the effects of market volatilities on Real Good 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 Real Good with a short position of Seneca Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Real Good and Seneca Foods.
Diversification Opportunities for Real Good and Seneca Foods
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Real and Seneca is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Real Good Food 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 Real Good 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 Real Good Food 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 Real Good i.e., Real Good and Seneca Foods go up and down completely randomly.
Pair Corralation between Real Good and Seneca Foods
Considering the 90-day investment horizon Real Good Food is expected to under-perform the Seneca Foods. In addition to that, Real Good is 1.67 times more volatile than Seneca Foods Corp. It trades about -0.31 of its total potential returns per unit of risk. Seneca Foods Corp is currently generating about 0.27 per unit of volatility. If you would invest 6,320 in Seneca Foods Corp on August 28, 2024 and sell it today you would earn a total of 868.00 from holding Seneca Foods Corp or generate 13.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Real Good Food vs. Seneca Foods Corp
Performance |
| Timeline |
| Real Good Food |
| Seneca Foods Corp |
Real Good and Seneca Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Real Good and Seneca Foods
The main advantage of trading using opposite Real Good and Seneca Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Good 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.| Real Good vs. Bellring Brands LLC | Real Good vs. Ingredion Incorporated | Real Good vs. Nomad Foods | Real Good vs. Simply Good Foods |
| Seneca Foods vs. Central Garden Pet | Seneca Foods vs. Central Garden Pet | Seneca Foods vs. Natures Sunshine Products | Seneca Foods vs. Associated British Foods |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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