Correlation Between SENECA FOODS and INPOST SA
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS and INPOST 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 INPOST 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 INPOST SA EO, you can compare the effects of market volatilities on SENECA FOODS and INPOST 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 INPOST SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS and INPOST SA.
Diversification Opportunities for SENECA FOODS and INPOST SA
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SENECA and INPOST is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and INPOST SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INPOST SA EO 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 INPOST SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INPOST SA EO has no effect on the direction of SENECA FOODS i.e., SENECA FOODS and INPOST SA go up and down completely randomly.
Pair Corralation between SENECA FOODS and INPOST SA
Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 1.92 times more return on investment than INPOST SA. However, SENECA FOODS is 1.92 times more volatile than INPOST SA EO. It trades about 0.15 of its potential returns per unit of risk. INPOST SA EO is currently generating about -0.03 per unit of risk. If you would invest 5,250 in SENECA FOODS A on September 12, 2024 and sell it today you would earn a total of 1,500 from holding SENECA FOODS A or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
SENECA FOODS A vs. INPOST SA EO
Performance |
| Timeline |
| SENECA FOODS A |
| INPOST SA EO |
SENECA FOODS and INPOST SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS and INPOST SA
The main advantage of trading using opposite SENECA FOODS and INPOST SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS position performs unexpectedly, INPOST 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 INPOST SA will offset losses from the drop in INPOST SA's long position.| SENECA FOODS vs. Check Point Software | SENECA FOODS vs. Consolidated Communications Holdings | SENECA FOODS vs. MAROC TELECOM | SENECA FOODS vs. Vishay Intertechnology |
| INPOST SA vs. MBANK | INPOST SA vs. CITY OFFICE REIT | INPOST SA vs. JSC Halyk bank | INPOST SA vs. MTI WIRELESS EDGE |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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