Correlation Between SUN ART and SENECA FOODS
Can any of the company-specific risk be diversified away by investing in both SUN ART 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 SUN ART and SENECA FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SUN ART RETAIL and SENECA FOODS A, you can compare the effects of market volatilities on SUN ART 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 SUN ART with a short position of SENECA FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUN ART and SENECA FOODS.
Diversification Opportunities for SUN ART and SENECA FOODS
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SUN and SENECA is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding SUN ART RETAIL and SENECA FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENECA FOODS A and SUN ART 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 SUN ART RETAIL 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 A has no effect on the direction of SUN ART i.e., SUN ART and SENECA FOODS go up and down completely randomly.
Pair Corralation between SUN ART and SENECA FOODS
Assuming the 90 days trading horizon SUN ART RETAIL is expected to generate 1.8 times more return on investment than SENECA FOODS. However, SUN ART is 1.8 times more volatile than SENECA FOODS A. It trades about 0.04 of its potential returns per unit of risk. SENECA FOODS A is currently generating about 0.03 per unit of risk. If you would invest 19.00 in SUN ART RETAIL on September 20, 2024 and sell it today you would earn a total of 12.00 from holding SUN ART RETAIL or generate 63.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SUN ART RETAIL vs. SENECA FOODS A
Performance |
| Timeline |
| SUN ART RETAIL |
| SENECA FOODS A |
SUN ART and SENECA FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SUN ART and SENECA FOODS
The main advantage of trading using opposite SUN ART and SENECA FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUN ART 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's long position.| SUN ART vs. SENECA FOODS A | SUN ART vs. Suntory Beverage Food | SUN ART vs. China Resources Beer | SUN ART vs. ScanSource |
| SENECA FOODS vs. American Eagle Outfitters | SENECA FOODS vs. JAPAN AIRLINES | SENECA FOODS vs. Tower One Wireless | SENECA FOODS vs. MAVEN WIRELESS SWEDEN |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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