Correlation Between Seneca Foods and Westrock Coffee
Can any of the company-specific risk be diversified away by investing in both Seneca Foods and Westrock Coffee 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 Westrock Coffee 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 Westrock Coffee, you can compare the effects of market volatilities on Seneca Foods and Westrock Coffee 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 Westrock Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seneca Foods and Westrock Coffee.
Diversification Opportunities for Seneca Foods and Westrock Coffee
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seneca and Westrock is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Seneca Foods Corp and Westrock Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westrock Coffee 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 Westrock Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westrock Coffee has no effect on the direction of Seneca Foods i.e., Seneca Foods and Westrock Coffee go up and down completely randomly.
Pair Corralation between Seneca Foods and Westrock Coffee
Assuming the 90 days horizon Seneca Foods is expected to generate 1.24 times less return on investment than Westrock Coffee. But when comparing it to its historical volatility, Seneca Foods Corp is 1.55 times less risky than Westrock Coffee. It trades about 0.27 of its potential returns per unit of risk. Westrock Coffee is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 698.00 in Westrock Coffee on August 28, 2024 and sell it today you would earn a total of 115.00 from holding Westrock Coffee or generate 16.48% 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. Westrock Coffee
Performance |
| Timeline |
| Seneca Foods Corp |
| Westrock Coffee |
Seneca Foods and Westrock Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seneca Foods and Westrock Coffee
The main advantage of trading using opposite Seneca Foods and Westrock Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seneca Foods position performs unexpectedly, Westrock Coffee 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 Westrock Coffee will offset losses from the drop in Westrock Coffee'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 |
| Westrock Coffee vs. Coffee Holding Co | Westrock Coffee vs. Bridgford Foods | Westrock Coffee vs. John B Sanfilippo | Westrock Coffee vs. Treehouse 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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