Correlation Between SENECA FOODS-A and GPT
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS-A and GPT 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 GPT 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 GPT Group, you can compare the effects of market volatilities on SENECA FOODS-A and GPT 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 GPT. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS-A and GPT.
Diversification Opportunities for SENECA FOODS-A and GPT
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SENECA and GPT is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and GPT Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GPT Group 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 GPT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GPT Group has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and GPT go up and down completely randomly.
Pair Corralation between SENECA FOODS-A and GPT
Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 1.16 times more return on investment than GPT. However, SENECA FOODS-A is 1.16 times more volatile than GPT Group. It trades about 0.28 of its potential returns per unit of risk. GPT Group is currently generating about 0.04 per unit of risk. If you would invest 5,500 in SENECA FOODS A on September 1, 2024 and sell it today you would earn a total of 950.00 from holding SENECA FOODS A or generate 17.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
SENECA FOODS A vs. GPT Group
Performance |
| Timeline |
| SENECA FOODS A |
| GPT Group |
SENECA FOODS-A and GPT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS-A and GPT
The main advantage of trading using opposite SENECA FOODS-A and GPT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS-A position performs unexpectedly, GPT 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 GPT will offset losses from the drop in GPT's long position.| SENECA FOODS-A vs. SIVERS SEMICONDUCTORS AB | SENECA FOODS-A vs. Darden Restaurants | SENECA FOODS-A vs. Reliance Steel Aluminum | SENECA FOODS-A vs. Q2M Managementberatung AG |
| GPT vs. AUSNUTRIA DAIRY | GPT vs. SENECA FOODS A | GPT vs. BII Railway Transportation | GPT vs. DICKS Sporting Goods |
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 Stocks Directory module to find actively traded stocks across global markets.
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