Correlation Between SENECA FOODS-A and AIB Group
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS-A and AIB Group 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 AIB Group 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 AIB Group plc, you can compare the effects of market volatilities on SENECA FOODS-A and AIB Group 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 AIB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS-A and AIB Group.
Diversification Opportunities for SENECA FOODS-A and AIB Group
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between SENECA and AIB is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and AIB Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIB Group plc 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 AIB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIB Group plc has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and AIB Group go up and down completely randomly.
Pair Corralation between SENECA FOODS-A and AIB Group
Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 1.08 times more return on investment than AIB Group. However, SENECA FOODS-A is 1.08 times more volatile than AIB Group plc. It trades about 0.28 of its potential returns per unit of risk. AIB Group plc is currently generating about 0.07 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 Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SENECA FOODS A vs. AIB Group plc
Performance |
| Timeline |
| SENECA FOODS A |
| AIB Group plc |
SENECA FOODS-A and AIB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS-A and AIB Group
The main advantage of trading using opposite SENECA FOODS-A and AIB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS-A position performs unexpectedly, AIB Group 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 AIB Group will offset losses from the drop in AIB Group'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 |
| AIB Group vs. NIPPON MEAT PACKERS | AIB Group vs. AUSNUTRIA DAIRY | AIB Group vs. INDOFOOD AGRI RES | AIB Group vs. SENECA FOODS A |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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