Correlation Between Seneca Foods and Lifeway Foods
Can any of the company-specific risk be diversified away by investing in both Seneca Foods and Lifeway Foods 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 Lifeway Foods 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 Lifeway Foods, you can compare the effects of market volatilities on Seneca Foods and Lifeway Foods 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 Lifeway Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seneca Foods and Lifeway Foods.
Diversification Opportunities for Seneca Foods and Lifeway Foods
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Seneca and Lifeway is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Seneca Foods Corp and Lifeway Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifeway Foods 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 Lifeway Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifeway Foods has no effect on the direction of Seneca Foods i.e., Seneca Foods and Lifeway Foods go up and down completely randomly.
Pair Corralation between Seneca Foods and Lifeway Foods
Assuming the 90 days horizon Seneca Foods Corp is expected to generate 18.11 times more return on investment than Lifeway Foods. However, Seneca Foods is 18.11 times more volatile than Lifeway Foods. It trades about 0.09 of its potential returns per unit of risk. Lifeway Foods is currently generating about 0.07 per unit of risk. If you would invest 6,303 in Seneca Foods Corp on August 27, 2024 and sell it today you would earn a total of 823.00 from holding Seneca Foods Corp or generate 13.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.31% |
| Values | Daily Returns |
Seneca Foods Corp vs. Lifeway Foods
Performance |
| Timeline |
| Seneca Foods Corp |
| Lifeway Foods |
Seneca Foods and Lifeway Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seneca Foods and Lifeway Foods
The main advantage of trading using opposite Seneca Foods and Lifeway Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seneca Foods position performs unexpectedly, Lifeway Foods 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 Lifeway Foods will offset losses from the drop in Lifeway Foods' 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 |
| Lifeway Foods vs. Bellring Brands LLC | Lifeway Foods vs. Ingredion Incorporated | Lifeway Foods vs. Nomad Foods | Lifeway Foods vs. Post Holdings |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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