Correlation Between TOTAL GABON and SENECA FOODS-A
Can any of the company-specific risk be diversified away by investing in both TOTAL GABON 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 TOTAL GABON 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 TOTAL GABON and SENECA FOODS A, you can compare the effects of market volatilities on TOTAL GABON 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 TOTAL GABON with a short position of SENECA FOODS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOTAL GABON and SENECA FOODS-A.
Diversification Opportunities for TOTAL GABON and SENECA FOODS-A
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TOTAL and SENECA is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding TOTAL GABON 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 TOTAL GABON 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 TOTAL GABON 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 TOTAL GABON i.e., TOTAL GABON and SENECA FOODS-A go up and down completely randomly.
Pair Corralation between TOTAL GABON and SENECA FOODS-A
Assuming the 90 days trading horizon TOTAL GABON is expected to generate 0.54 times more return on investment than SENECA FOODS-A. However, TOTAL GABON is 1.87 times less risky than SENECA FOODS-A. It trades about 0.06 of its potential returns per unit of risk. SENECA FOODS A is currently generating about 0.02 per unit of risk. If you would invest 12,348 in TOTAL GABON on September 3, 2024 and sell it today you would earn a total of 6,052 from holding TOTAL GABON or generate 49.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOTAL GABON vs. SENECA FOODS A
Performance |
| Timeline |
| TOTAL GABON |
| SENECA FOODS A |
TOTAL GABON and SENECA FOODS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOTAL GABON and SENECA FOODS-A
The main advantage of trading using opposite TOTAL GABON and SENECA FOODS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOTAL GABON 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.| TOTAL GABON vs. TOTAL BANGUN PERSAD | TOTAL GABON vs. TOTAL BANGUN PERSAD | TOTAL GABON vs. TOTAL ENERGY SERVS | TOTAL GABON vs. Anheuser Busch InBev SANV |
| SENECA FOODS-A vs. TOTAL GABON | SENECA FOODS-A vs. Walgreens Boots Alliance | SENECA FOODS-A vs. Peak Resources Limited |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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