Correlation Between SENECA FOODS and COFACE SA
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS and COFACE SA 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 COFACE SA 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 COFACE SA, you can compare the effects of market volatilities on SENECA FOODS and COFACE SA 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 COFACE SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS and COFACE SA.
Diversification Opportunities for SENECA FOODS and COFACE SA
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SENECA and COFACE is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and COFACE SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFACE 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 COFACE SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFACE SA has no effect on the direction of SENECA FOODS i.e., SENECA FOODS and COFACE SA go up and down completely randomly.
Pair Corralation between SENECA FOODS and COFACE SA
Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 2.02 times more return on investment than COFACE SA. However, SENECA FOODS is 2.02 times more volatile than COFACE SA. It trades about 0.17 of its potential returns per unit of risk. COFACE SA is currently generating about -0.3 per unit of risk. If you would invest 6,750 in SENECA FOODS A on September 24, 2024 and sell it today you would earn a total of 500.00 from holding SENECA FOODS A or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SENECA FOODS A vs. COFACE SA
Performance |
| Timeline |
| SENECA FOODS A |
| COFACE SA |
SENECA FOODS and COFACE SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS and COFACE SA
The main advantage of trading using opposite SENECA FOODS and COFACE SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS position performs unexpectedly, COFACE SA 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 COFACE SA will offset losses from the drop in COFACE SA's long position.| SENECA FOODS vs. National Beverage Corp | SENECA FOODS vs. PT Indofood Sukses | SENECA FOODS vs. Food Life Companies | SENECA FOODS vs. TYSON FOODS A |
| COFACE SA vs. Sterling Construction | COFACE SA vs. SENECA FOODS A | COFACE SA vs. National Beverage Corp | COFACE SA vs. Dairy Farm International |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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