Correlation Between Seneca Foods and Ingredion Incorporated
Can any of the company-specific risk be diversified away by investing in both Seneca Foods and Ingredion Incorporated 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 Ingredion Incorporated 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 Ingredion Incorporated, you can compare the effects of market volatilities on Seneca Foods and Ingredion Incorporated 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 Ingredion Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seneca Foods and Ingredion Incorporated.
Diversification Opportunities for Seneca Foods and Ingredion Incorporated
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Seneca and Ingredion is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Seneca Foods Corp and Ingredion Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingredion Incorporated 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 Ingredion Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingredion Incorporated has no effect on the direction of Seneca Foods i.e., Seneca Foods and Ingredion Incorporated go up and down completely randomly.
Pair Corralation between Seneca Foods and Ingredion Incorporated
Assuming the 90 days horizon Seneca Foods Corp is expected to generate 99.67 times more return on investment than Ingredion Incorporated. However, Seneca Foods is 99.67 times more volatile than Ingredion Incorporated. It trades about 0.13 of its potential returns per unit of risk. Ingredion Incorporated is currently generating about 0.11 per unit of risk. If you would invest 5,351 in Seneca Foods Corp on August 25, 2024 and sell it today you would earn a total of 1,775 from holding Seneca Foods Corp or generate 33.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 48.28% |
| Values | Daily Returns |
Seneca Foods Corp vs. Ingredion Incorporated
Performance |
| Timeline |
| Seneca Foods Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Ingredion Incorporated |
Seneca Foods and Ingredion Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seneca Foods and Ingredion Incorporated
The main advantage of trading using opposite Seneca Foods and Ingredion Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seneca Foods position performs unexpectedly, Ingredion Incorporated 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 Ingredion Incorporated will offset losses from the drop in Ingredion Incorporated's long position.| Seneca Foods vs. Bellring Brands LLC | Seneca Foods vs. Treehouse Foods | Seneca Foods vs. Ingredion Incorporated | Seneca Foods vs. JM Smucker |
| Ingredion Incorporated vs. Lancaster Colony | Ingredion Incorporated vs. Treehouse Foods | Ingredion Incorporated vs. John B Sanfilippo | Ingredion Incorporated vs. Seneca Foods Corp |
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 Stocks Directory module to find actively traded stocks across global markets.
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