Correlation Between Seneca Foods and Premier Foods
Can any of the company-specific risk be diversified away by investing in both Seneca Foods and Premier 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 Premier 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 Premier Foods Plc, you can compare the effects of market volatilities on Seneca Foods and Premier 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 Premier Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seneca Foods and Premier Foods.
Diversification Opportunities for Seneca Foods and Premier Foods
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Seneca and Premier is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Seneca Foods Corp and Premier Foods Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Foods Plc 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 Premier Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Foods Plc has no effect on the direction of Seneca Foods i.e., Seneca Foods and Premier Foods go up and down completely randomly.
Pair Corralation between Seneca Foods and Premier Foods
Assuming the 90 days horizon Seneca Foods Corp is expected to generate 68.96 times more return on investment than Premier Foods. However, Seneca Foods is 68.96 times more volatile than Premier Foods Plc. It trades about 0.16 of its potential returns per unit of risk. Premier Foods Plc is currently generating about 0.08 per unit of risk. If you would invest 5,283 in Seneca Foods Corp on September 1, 2024 and sell it today you would earn a total of 1,921 from holding Seneca Foods Corp or generate 36.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 79.21% |
| Values | Daily Returns |
Seneca Foods Corp vs. Premier Foods Plc
Performance |
| Timeline |
| Seneca Foods Corp |
| Premier Foods Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Seneca Foods and Premier Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seneca Foods and Premier Foods
The main advantage of trading using opposite Seneca Foods and Premier Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seneca Foods position performs unexpectedly, Premier 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 Premier Foods will offset losses from the drop in Premier 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 |
| Premier Foods vs. Torque Lifestyle Brands | Premier Foods vs. Naturally Splendid Enterprises | Premier Foods vs. Aryzta AG PK | Premier Foods vs. Premier Foods Plc |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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