Correlation Between SENECA FOODS-A and GFL ENVIRONM(SUBVTSH
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS-A and GFL ENVIRONM(SUBVTSH 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 GFL ENVIRONM(SUBVTSH 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 GFL ENVIRONM, you can compare the effects of market volatilities on SENECA FOODS-A and GFL ENVIRONM(SUBVTSH 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 GFL ENVIRONM(SUBVTSH. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS-A and GFL ENVIRONM(SUBVTSH.
Diversification Opportunities for SENECA FOODS-A and GFL ENVIRONM(SUBVTSH
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SENECA and GFL is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and GFL ENVIRONM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFL ENVIRONM(SUBVTSH 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 GFL ENVIRONM(SUBVTSH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFL ENVIRONM(SUBVTSH has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and GFL ENVIRONM(SUBVTSH go up and down completely randomly.
Pair Corralation between SENECA FOODS-A and GFL ENVIRONM(SUBVTSH
Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 1.12 times more return on investment than GFL ENVIRONM(SUBVTSH. However, SENECA FOODS-A is 1.12 times more volatile than GFL ENVIRONM. It trades about 0.11 of its potential returns per unit of risk. GFL ENVIRONM is currently generating about 0.07 per unit of risk. If you would invest 4,620 in SENECA FOODS A on December 8, 2024 and sell it today you would earn a total of 3,130 from holding SENECA FOODS A or generate 67.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SENECA FOODS A vs. GFL ENVIRONM
Performance |
| Timeline |
| SENECA FOODS A |
| GFL ENVIRONM(SUBVTSH |
SENECA FOODS-A and GFL ENVIRONM(SUBVTSH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS-A and GFL ENVIRONM(SUBVTSH
The main advantage of trading using opposite SENECA FOODS-A and GFL ENVIRONM(SUBVTSH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS-A position performs unexpectedly, GFL ENVIRONM(SUBVTSH 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 GFL ENVIRONM(SUBVTSH will offset losses from the drop in GFL ENVIRONM(SUBVTSH's long position.| SENECA FOODS-A vs. AAC TECHNOLOGHLDGADR | SENECA FOODS-A vs. SBI Insurance Group | SENECA FOODS-A vs. ACCSYS TECHPLC EO | SENECA FOODS-A vs. Easy Software AG |
| GFL ENVIRONM(SUBVTSH vs. Sumitomo Chemical | GFL ENVIRONM(SUBVTSH vs. Air Transport Services | GFL ENVIRONM(SUBVTSH vs. De Grey Mining | GFL ENVIRONM(SUBVTSH vs. SIERRA METALS |
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.
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