Correlation Between SENECA FOODS-A and HYDROFARM HLD
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS-A and HYDROFARM HLD 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 HYDROFARM HLD 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 HYDROFARM HLD GRP, you can compare the effects of market volatilities on SENECA FOODS-A and HYDROFARM HLD 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 HYDROFARM HLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS-A and HYDROFARM HLD.
Diversification Opportunities for SENECA FOODS-A and HYDROFARM HLD
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SENECA and HYDROFARM is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and HYDROFARM HLD GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYDROFARM HLD GRP 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 HYDROFARM HLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYDROFARM HLD GRP has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and HYDROFARM HLD go up and down completely randomly.
Pair Corralation between SENECA FOODS-A and HYDROFARM HLD
Assuming the 90 days trading horizon SENECA FOODS-A is expected to generate 1.99 times less return on investment than HYDROFARM HLD. But when comparing it to its historical volatility, SENECA FOODS A is 2.6 times less risky than HYDROFARM HLD. It trades about 0.09 of its potential returns per unit of risk. HYDROFARM HLD GRP is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 65.00 in HYDROFARM HLD GRP on October 13, 2024 and sell it today you would earn a total of 3.00 from holding HYDROFARM HLD GRP or generate 4.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SENECA FOODS A vs. HYDROFARM HLD GRP
Performance |
| Timeline |
| SENECA FOODS A |
| HYDROFARM HLD GRP |
SENECA FOODS-A and HYDROFARM HLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS-A and HYDROFARM HLD
The main advantage of trading using opposite SENECA FOODS-A and HYDROFARM HLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS-A position performs unexpectedly, HYDROFARM HLD 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 HYDROFARM HLD will offset losses from the drop in HYDROFARM HLD's long position.| SENECA FOODS-A vs. ELECTRONIC ARTS | SENECA FOODS-A vs. Renesas Electronics | SENECA FOODS-A vs. CARSALESCOM | SENECA FOODS-A vs. MOVIE GAMES SA |
| HYDROFARM HLD vs. Superior Plus Corp | HYDROFARM HLD vs. NMI Holdings | HYDROFARM HLD vs. SIVERS SEMICONDUCTORS AB | HYDROFARM HLD vs. Talanx AG |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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