Correlation Between Seneca Foods and Farmer Bros
Can any of the company-specific risk be diversified away by investing in both Seneca Foods and Farmer Bros 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 Seneca Foods and Farmer Bros into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seneca Foods Corp and Farmer Bros Co, you can compare the effects of market volatilities on Seneca Foods and Farmer Bros 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 Seneca Foods with a short position of Farmer Bros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seneca Foods and Farmer Bros.
Diversification Opportunities for Seneca Foods and Farmer Bros
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seneca and Farmer is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Seneca Foods Corp and Farmer Bros Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmer Bros and Seneca 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 Seneca Foods Corp are associated (or correlated) with Farmer Bros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmer Bros has no effect on the direction of Seneca Foods i.e., Seneca Foods and Farmer Bros go up and down completely randomly.
Pair Corralation between Seneca Foods and Farmer Bros
Assuming the 90 days horizon Seneca Foods Corp is expected to generate 0.43 times more return on investment than Farmer Bros. However, Seneca Foods Corp is 2.3 times less risky than Farmer Bros. It trades about 0.03 of its potential returns per unit of risk. Farmer Bros Co is currently generating about -0.02 per unit of risk. If you would invest 5,781 in Seneca Foods Corp on November 2, 2024 and sell it today you would earn a total of 1,367 from holding Seneca Foods Corp or generate 23.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seneca Foods Corp vs. Farmer Bros Co
Performance |
| Timeline |
| Seneca Foods Corp |
| Farmer Bros |
Seneca Foods and Farmer Bros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seneca Foods and Farmer Bros
The main advantage of trading using opposite Seneca Foods and Farmer Bros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seneca Foods position performs unexpectedly, Farmer Bros 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 Farmer Bros will offset losses from the drop in Farmer Bros' long position.| Seneca Foods vs. Central Garden Pet | Seneca Foods vs. Central Garden Pet | Seneca Foods vs. Natures Sunshine Products | Seneca Foods vs. Associated British Foods |
| Farmer Bros vs. Bridgford Foods | Farmer Bros vs. Seneca Foods Corp | Farmer Bros vs. Lifeway Foods | Farmer Bros vs. SSMTF |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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