Correlation Between Seneca Foods and Simply Good
Can any of the company-specific risk be diversified away by investing in both Seneca Foods and Simply Good 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 Simply Good 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 Simply Good Foods, you can compare the effects of market volatilities on Seneca Foods and Simply Good 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 Simply Good. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seneca Foods and Simply Good.
Diversification Opportunities for Seneca Foods and Simply Good
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Seneca and Simply is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Seneca Foods Corp and Simply Good Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simply Good 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 Simply Good. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simply Good Foods has no effect on the direction of Seneca Foods i.e., Seneca Foods and Simply Good go up and down completely randomly.
Pair Corralation between Seneca Foods and Simply Good
Assuming the 90 days horizon Seneca Foods Corp is expected to generate 121.52 times more return on investment than Simply Good. However, Seneca Foods is 121.52 times more volatile than Simply Good Foods. It trades about 0.16 of its potential returns per unit of risk. Simply Good Foods is currently generating about 0.04 per unit of risk. If you would invest 5,880 in Seneca Foods Corp on August 30, 2024 and sell it today you would earn a total of 1,490 from holding Seneca Foods Corp or generate 25.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 48.41% |
| Values | Daily Returns |
Seneca Foods Corp vs. Simply Good Foods
Performance |
| Timeline |
| Seneca Foods Corp |
| Simply Good Foods |
Seneca Foods and Simply Good Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seneca Foods and Simply Good
The main advantage of trading using opposite Seneca Foods and Simply Good positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seneca Foods position performs unexpectedly, Simply Good 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 Simply Good will offset losses from the drop in Simply Good'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 |
| Simply Good vs. Post Holdings | Simply Good vs. Treehouse Foods | Simply Good vs. J J Snack | Simply Good vs. Central Garden Pet |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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