Correlation Between SENECA FOODS and WAGNERS HOLDING
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS and WAGNERS HOLDING 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 WAGNERS HOLDING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SENECA FOODS A and WAGNERS HOLDING LTD, you can compare the effects of market volatilities on SENECA FOODS and WAGNERS HOLDING 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 WAGNERS HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS and WAGNERS HOLDING.
Diversification Opportunities for SENECA FOODS and WAGNERS HOLDING
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SENECA and WAGNERS is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and WAGNERS HOLDING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WAGNERS HOLDING LTD 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 A are associated (or correlated) with WAGNERS HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WAGNERS HOLDING LTD has no effect on the direction of SENECA FOODS i.e., SENECA FOODS and WAGNERS HOLDING go up and down completely randomly.
Pair Corralation between SENECA FOODS and WAGNERS HOLDING
Assuming the 90 days trading horizon SENECA FOODS A is expected to under-perform the WAGNERS HOLDING. But the stock apears to be less risky and, when comparing its historical volatility, SENECA FOODS A is 1.35 times less risky than WAGNERS HOLDING. The stock trades about -0.2 of its potential returns per unit of risk. The WAGNERS HOLDING LTD is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 81.00 in WAGNERS HOLDING LTD on October 28, 2024 and sell it today you would earn a total of 11.00 from holding WAGNERS HOLDING LTD or generate 13.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SENECA FOODS A vs. WAGNERS HOLDING LTD
Performance |
| Timeline |
| SENECA FOODS A |
| WAGNERS HOLDING LTD |
SENECA FOODS and WAGNERS HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS and WAGNERS HOLDING
The main advantage of trading using opposite SENECA FOODS and WAGNERS HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS position performs unexpectedly, WAGNERS HOLDING 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 WAGNERS HOLDING will offset losses from the drop in WAGNERS HOLDING's long position.| SENECA FOODS vs. GURU ORGANIC ENERGY | SENECA FOODS vs. AIR PRODCHEMICALS | SENECA FOODS vs. SAN MIGUEL BREWERY | SENECA FOODS vs. GWILLI FOOD |
| WAGNERS HOLDING vs. Nomad Foods | WAGNERS HOLDING vs. US FOODS HOLDING | WAGNERS HOLDING vs. SENECA FOODS A | WAGNERS HOLDING vs. BOSTON BEER A |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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