Correlation Between Seneca Foods and Post Holdings
Can any of the company-specific risk be diversified away by investing in both Seneca Foods and Post Holdings 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 Post Holdings 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 Post Holdings, you can compare the effects of market volatilities on Seneca Foods and Post Holdings 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 Post Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seneca Foods and Post Holdings.
Diversification Opportunities for Seneca Foods and Post Holdings
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seneca and Post is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Seneca Foods Corp and Post Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Post Holdings 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 Post Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Post Holdings has no effect on the direction of Seneca Foods i.e., Seneca Foods and Post Holdings go up and down completely randomly.
Pair Corralation between Seneca Foods and Post Holdings
Assuming the 90 days horizon Seneca Foods Corp is expected to generate 2.82 times more return on investment than Post Holdings. However, Seneca Foods is 2.82 times more volatile than Post Holdings. It trades about 0.34 of its potential returns per unit of risk. Post Holdings is currently generating about 0.04 per unit of risk. If you would invest 6,144 in Seneca Foods Corp on August 28, 2024 and sell it today you would earn a total of 1,226 from holding Seneca Foods Corp or generate 19.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 42.86% |
| Values | Daily Returns |
Seneca Foods Corp vs. Post Holdings
Performance |
| Timeline |
| Seneca Foods Corp |
| Post Holdings |
Seneca Foods and Post Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seneca Foods and Post Holdings
The main advantage of trading using opposite Seneca Foods and Post Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seneca Foods position performs unexpectedly, Post Holdings 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 Post Holdings will offset losses from the drop in Post Holdings' 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 |
| Post Holdings vs. Bellring Brands LLC | Post Holdings vs. Ingredion Incorporated | Post Holdings vs. Nomad Foods | Post Holdings vs. Simply Good 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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