Correlation Between SENECA FOODS and Kaufman Broad
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS and Kaufman Broad 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 Kaufman Broad 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 Kaufman Broad SA, you can compare the effects of market volatilities on SENECA FOODS and Kaufman Broad 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 Kaufman Broad. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS and Kaufman Broad.
Diversification Opportunities for SENECA FOODS and Kaufman Broad
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SENECA and Kaufman is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and Kaufman Broad SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaufman Broad SA 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 Kaufman Broad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaufman Broad SA has no effect on the direction of SENECA FOODS i.e., SENECA FOODS and Kaufman Broad go up and down completely randomly.
Pair Corralation between SENECA FOODS and Kaufman Broad
Assuming the 90 days trading horizon SENECA FOODS A is expected to under-perform the Kaufman Broad. But the stock apears to be less risky and, when comparing its historical volatility, SENECA FOODS A is 1.03 times less risky than Kaufman Broad. The stock trades about -0.21 of its potential returns per unit of risk. The Kaufman Broad SA is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 3,190 in Kaufman Broad SA on October 27, 2024 and sell it today you would lose (45.00) from holding Kaufman Broad SA or give up 1.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SENECA FOODS A vs. Kaufman Broad SA
Performance |
| Timeline |
| SENECA FOODS A |
| Kaufman Broad SA |
SENECA FOODS and Kaufman Broad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS and Kaufman Broad
The main advantage of trading using opposite SENECA FOODS and Kaufman Broad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS position performs unexpectedly, Kaufman Broad 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 Kaufman Broad will offset losses from the drop in Kaufman Broad's long position.| SENECA FOODS vs. Apple Inc | SENECA FOODS vs. Apple Inc | SENECA FOODS vs. Apple Inc | SENECA FOODS vs. Apple Inc |
| Kaufman Broad vs. Nok Airlines PCL | Kaufman Broad vs. China Eastern Airlines | Kaufman Broad vs. Singapore Airlines Limited | Kaufman Broad vs. JAPAN AIRLINES |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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