Correlation Between Seneca Foods and Lancaster Colony
Can any of the company-specific risk be diversified away by investing in both Seneca Foods and Lancaster Colony 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 Lancaster Colony 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 Lancaster Colony, you can compare the effects of market volatilities on Seneca Foods and Lancaster Colony 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 Lancaster Colony. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seneca Foods and Lancaster Colony.
Diversification Opportunities for Seneca Foods and Lancaster Colony
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Seneca and Lancaster is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Seneca Foods Corp and Lancaster Colony in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lancaster Colony 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 Lancaster Colony. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lancaster Colony has no effect on the direction of Seneca Foods i.e., Seneca Foods and Lancaster Colony go up and down completely randomly.
Pair Corralation between Seneca Foods and Lancaster Colony
Assuming the 90 days horizon Seneca Foods Corp is expected to generate 0.95 times more return on investment than Lancaster Colony. However, Seneca Foods Corp is 1.05 times less risky than Lancaster Colony. It trades about 0.3 of its potential returns per unit of risk. Lancaster Colony is currently generating about 0.11 per unit of risk. If you would invest 6,195 in Seneca Foods Corp on August 24, 2024 and sell it today you would earn a total of 1,002 from holding Seneca Foods Corp or generate 16.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seneca Foods Corp vs. Lancaster Colony
Performance |
| Timeline |
| Seneca Foods Corp |
| Lancaster Colony |
Seneca Foods and Lancaster Colony Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seneca Foods and Lancaster Colony
The main advantage of trading using opposite Seneca Foods and Lancaster Colony positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seneca Foods position performs unexpectedly, Lancaster Colony 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 Lancaster Colony will offset losses from the drop in Lancaster Colony's long position.| Seneca Foods vs. Bellring Brands LLC | Seneca Foods vs. Treehouse Foods | Seneca Foods vs. Ingredion Incorporated | Seneca Foods vs. JM Smucker |
| Lancaster Colony vs. Bellring Brands LLC | Lancaster Colony vs. Treehouse Foods | Lancaster Colony vs. Ingredion Incorporated | Lancaster Colony vs. JM Smucker |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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