Correlation Between Simply Good and Seneca Foods
Can any of the company-specific risk be diversified away by investing in both Simply Good and Seneca 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 Simply Good and Seneca Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simply Good Foods and Seneca Foods Corp, you can compare the effects of market volatilities on Simply Good and Seneca 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 Simply Good with a short position of Seneca Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simply Good and Seneca Foods.
Diversification Opportunities for Simply Good and Seneca Foods
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Simply and Seneca is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Simply Good Foods and Seneca Foods Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seneca Foods Corp and Simply Good 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 Simply Good Foods are associated (or correlated) with Seneca Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seneca Foods Corp has no effect on the direction of Simply Good i.e., Simply Good and Seneca Foods go up and down completely randomly.
Pair Corralation between Simply Good and Seneca Foods
Given the investment horizon of 90 days Simply Good is expected to generate 1.38 times less return on investment than Seneca Foods. But when comparing it to its historical volatility, Simply Good Foods is 2.39 times less risky than Seneca Foods. It trades about 0.48 of its potential returns per unit of risk. Seneca Foods Corp is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 6,342 in Seneca Foods Corp on August 27, 2024 and sell it today you would earn a total of 784.00 from holding Seneca Foods Corp or generate 12.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 61.9% |
| Values | Daily Returns |
Simply Good Foods vs. Seneca Foods Corp
Performance |
| Timeline |
| Simply Good Foods |
| Seneca Foods Corp |
Simply Good and Seneca Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simply Good and Seneca Foods
The main advantage of trading using opposite Simply Good and Seneca Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simply Good position performs unexpectedly, Seneca 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 Seneca Foods will offset losses from the drop in Seneca Foods' long position.| Simply Good vs. Post Holdings | Simply Good vs. Treehouse Foods | Simply Good vs. J J Snack | Simply Good vs. Central Garden Pet |
| Seneca Foods vs. Bridgford Foods | Seneca Foods vs. J J Snack | Seneca Foods vs. Central Garden Pet | Seneca Foods 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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