Correlation Between Seneca Foods and Utz Brands
Can any of the company-specific risk be diversified away by investing in both Seneca Foods and Utz Brands 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 Utz Brands 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 Utz Brands, you can compare the effects of market volatilities on Seneca Foods and Utz Brands 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 Utz Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seneca Foods and Utz Brands.
Diversification Opportunities for Seneca Foods and Utz Brands
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Seneca and Utz is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Seneca Foods Corp and Utz Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utz Brands 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 Utz Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utz Brands has no effect on the direction of Seneca Foods i.e., Seneca Foods and Utz Brands go up and down completely randomly.
Pair Corralation between Seneca Foods and Utz Brands
Assuming the 90 days horizon Seneca Foods Corp is expected to generate 1.27 times more return on investment than Utz Brands. However, Seneca Foods is 1.27 times more volatile than Utz Brands. It trades about 0.35 of its potential returns per unit of risk. Utz Brands is currently generating about 0.1 per unit of risk. If you would invest 6,173 in Seneca Foods Corp on August 31, 2024 and sell it today you would earn a total of 1,031 from holding Seneca Foods Corp or generate 16.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.64% |
| Values | Daily Returns |
Seneca Foods Corp vs. Utz Brands
Performance |
| Timeline |
| Seneca Foods Corp |
| Utz Brands |
Seneca Foods and Utz Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seneca Foods and Utz Brands
The main advantage of trading using opposite Seneca Foods and Utz Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seneca Foods position performs unexpectedly, Utz Brands 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 Utz Brands will offset losses from the drop in Utz Brands' 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 |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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