Correlation Between Hostess Brands and Seneca Foods
Can any of the company-specific risk be diversified away by investing in both Hostess Brands 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 Hostess Brands and Seneca Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hostess Brands and Seneca Foods Corp, you can compare the effects of market volatilities on Hostess Brands 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 Hostess Brands with a short position of Seneca Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hostess Brands and Seneca Foods.
Diversification Opportunities for Hostess Brands and Seneca Foods
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hostess and Seneca is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hostess Brands 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 Hostess Brands 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 Hostess Brands 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 Hostess Brands i.e., Hostess Brands and Seneca Foods go up and down completely randomly.
Pair Corralation between Hostess Brands and Seneca Foods
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 | 7.14% |
| Values | Daily Returns |
Hostess Brands vs. Seneca Foods Corp
Performance |
| Timeline |
| Hostess Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Seneca Foods Corp |
Hostess Brands and Seneca Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hostess Brands and Seneca Foods
The main advantage of trading using opposite Hostess Brands and Seneca Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hostess Brands 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.| Hostess Brands vs. Simply Good Foods | Hostess Brands vs. Treehouse Foods | Hostess Brands vs. Post Holdings | Hostess Brands vs. Nomad Foods |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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