Correlation Between OPKO HEALTH and SENECA FOODS-A
Can any of the company-specific risk be diversified away by investing in both OPKO HEALTH and SENECA FOODS-A 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 OPKO HEALTH and SENECA FOODS-A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OPKO HEALTH and SENECA FOODS A, you can compare the effects of market volatilities on OPKO HEALTH and SENECA FOODS-A 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 OPKO HEALTH with a short position of SENECA FOODS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of OPKO HEALTH and SENECA FOODS-A.
Diversification Opportunities for OPKO HEALTH and SENECA FOODS-A
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OPKO and SENECA is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding OPKO HEALTH 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 OPKO HEALTH 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 OPKO HEALTH are associated (or correlated) with SENECA FOODS-A. 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 OPKO HEALTH i.e., OPKO HEALTH and SENECA FOODS-A go up and down completely randomly.
Pair Corralation between OPKO HEALTH and SENECA FOODS-A
Assuming the 90 days trading horizon OPKO HEALTH is expected to under-perform the SENECA FOODS-A. But the stock apears to be less risky and, when comparing its historical volatility, OPKO HEALTH is 2.75 times less risky than SENECA FOODS-A. The stock trades about -0.28 of its potential returns per unit of risk. The SENECA FOODS A is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 6,700 in SENECA FOODS A on October 11, 2024 and sell it today you would earn a total of 350.00 from holding SENECA FOODS A or generate 5.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OPKO HEALTH vs. SENECA FOODS A
Performance |
| Timeline |
| OPKO HEALTH |
| SENECA FOODS A |
OPKO HEALTH and SENECA FOODS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OPKO HEALTH and SENECA FOODS-A
The main advantage of trading using opposite OPKO HEALTH and SENECA FOODS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OPKO HEALTH position performs unexpectedly, SENECA FOODS-A 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-A will offset losses from the drop in SENECA FOODS-A's long position.| OPKO HEALTH vs. Apple Inc | OPKO HEALTH vs. Apple Inc | OPKO HEALTH vs. Apple Inc | OPKO HEALTH vs. Apple Inc |
| SENECA FOODS-A vs. OPKO HEALTH | SENECA FOODS-A vs. Fast Retailing Co | SENECA FOODS-A vs. Retail Estates NV | SENECA FOODS-A vs. Molina Healthcare |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |