Correlation Between SENECA FOODS-A and KYUSHU EL
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS-A and KYUSHU EL 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-A and KYUSHU EL 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 KYUSHU EL PWR, you can compare the effects of market volatilities on SENECA FOODS-A and KYUSHU EL 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-A with a short position of KYUSHU EL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS-A and KYUSHU EL.
Diversification Opportunities for SENECA FOODS-A and KYUSHU EL
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SENECA and KYUSHU is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and KYUSHU EL PWR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KYUSHU EL PWR and SENECA FOODS-A 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 KYUSHU EL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KYUSHU EL PWR has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and KYUSHU EL go up and down completely randomly.
Pair Corralation between SENECA FOODS-A and KYUSHU EL
Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 0.89 times more return on investment than KYUSHU EL. However, SENECA FOODS A is 1.12 times less risky than KYUSHU EL. It trades about 0.09 of its potential returns per unit of risk. KYUSHU EL PWR is currently generating about -0.02 per unit of risk. If you would invest 5,300 in SENECA FOODS A on September 5, 2024 and sell it today you would earn a total of 1,450 from holding SENECA FOODS A or generate 27.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
SENECA FOODS A vs. KYUSHU EL PWR
Performance |
| Timeline |
| SENECA FOODS A |
| KYUSHU EL PWR |
SENECA FOODS-A and KYUSHU EL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS-A and KYUSHU EL
The main advantage of trading using opposite SENECA FOODS-A and KYUSHU EL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS-A position performs unexpectedly, KYUSHU EL 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 KYUSHU EL will offset losses from the drop in KYUSHU EL's long position.| SENECA FOODS-A vs. TOTAL GABON | SENECA FOODS-A vs. Walgreens Boots Alliance | SENECA FOODS-A vs. Peak Resources Limited |
| KYUSHU EL vs. Cal Maine Foods | KYUSHU EL vs. INDOFOOD AGRI RES | KYUSHU EL vs. TYSON FOODS A | KYUSHU EL vs. SENECA FOODS 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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