Correlation Between Seneca Foods and A2 Milk
Can any of the company-specific risk be diversified away by investing in both Seneca Foods and A2 Milk 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 A2 Milk 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 The A2 Milk, you can compare the effects of market volatilities on Seneca Foods and A2 Milk 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 A2 Milk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seneca Foods and A2 Milk.
Diversification Opportunities for Seneca Foods and A2 Milk
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seneca and ACOPY is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Seneca Foods Corp and The A2 Milk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A2 Milk 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 A2 Milk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A2 Milk has no effect on the direction of Seneca Foods i.e., Seneca Foods and A2 Milk go up and down completely randomly.
Pair Corralation between Seneca Foods and A2 Milk
Assuming the 90 days horizon Seneca Foods Corp is expected to generate 40.34 times more return on investment than A2 Milk. However, Seneca Foods is 40.34 times more volatile than The A2 Milk. It trades about 0.15 of its potential returns per unit of risk. The A2 Milk is currently generating about 0.02 per unit of risk. If you would invest 6,090 in Seneca Foods Corp on September 3, 2024 and sell it today you would earn a total of 1,114 from holding Seneca Foods Corp or generate 18.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 56.25% |
| Values | Daily Returns |
Seneca Foods Corp vs. The A2 Milk
Performance |
| Timeline |
| Seneca Foods Corp |
| A2 Milk |
Seneca Foods and A2 Milk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seneca Foods and A2 Milk
The main advantage of trading using opposite Seneca Foods and A2 Milk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seneca Foods position performs unexpectedly, A2 Milk 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 A2 Milk will offset losses from the drop in A2 Milk's long position.| Seneca Foods vs. Bridgford Foods | Seneca Foods vs. J J Snack | Seneca Foods vs. Central Garden Pet | Seneca Foods vs. Central Garden Pet |
| A2 Milk vs. Avi Ltd ADR | A2 Milk vs. Altavoz Entertainment | A2 Milk vs. The a2 Milk | A2 Milk vs. Aryzta AG PK |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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