Correlation Between Seneca Foods and Laird Superfood
Can any of the company-specific risk be diversified away by investing in both Seneca Foods and Laird Superfood 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 Laird Superfood 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 Laird Superfood, you can compare the effects of market volatilities on Seneca Foods and Laird Superfood 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 Laird Superfood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seneca Foods and Laird Superfood.
Diversification Opportunities for Seneca Foods and Laird Superfood
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seneca and Laird is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Seneca Foods Corp and Laird Superfood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laird Superfood 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 Laird Superfood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laird Superfood has no effect on the direction of Seneca Foods i.e., Seneca Foods and Laird Superfood go up and down completely randomly.
Pair Corralation between Seneca Foods and Laird Superfood
Assuming the 90 days horizon Seneca Foods is expected to generate 1.87 times less return on investment than Laird Superfood. But when comparing it to its historical volatility, Seneca Foods Corp is 3.03 times less risky than Laird Superfood. It trades about 0.27 of its potential returns per unit of risk. Laird Superfood is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 724.00 in Laird Superfood on August 28, 2024 and sell it today you would earn a total of 161.00 from holding Laird Superfood or generate 22.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seneca Foods Corp vs. Laird Superfood
Performance |
| Timeline |
| Seneca Foods Corp |
| Laird Superfood |
Seneca Foods and Laird Superfood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seneca Foods and Laird Superfood
The main advantage of trading using opposite Seneca Foods and Laird Superfood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seneca Foods position performs unexpectedly, Laird Superfood 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 Laird Superfood will offset losses from the drop in Laird Superfood's 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 |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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