Correlation Between SENECA FOODS and Boiron SA
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS and Boiron 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 Boiron 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 Boiron SA, you can compare the effects of market volatilities on SENECA FOODS and Boiron 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 Boiron SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS and Boiron SA.
Diversification Opportunities for SENECA FOODS and Boiron SA
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SENECA and Boiron is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and Boiron SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boiron 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 Boiron SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boiron SA has no effect on the direction of SENECA FOODS i.e., SENECA FOODS and Boiron SA go up and down completely randomly.
Pair Corralation between SENECA FOODS and Boiron SA
Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 1.15 times more return on investment than Boiron SA. However, SENECA FOODS is 1.15 times more volatile than Boiron SA. It trades about 0.22 of its potential returns per unit of risk. Boiron SA is currently generating about -0.17 per unit of risk. If you would invest 5,650 in SENECA FOODS A on September 21, 2024 and sell it today you would earn a total of 1,450 from holding SENECA FOODS A or generate 25.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SENECA FOODS A vs. Boiron SA
Performance |
| Timeline |
| SENECA FOODS A |
| Boiron SA |
SENECA FOODS and Boiron SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS and Boiron SA
The main advantage of trading using opposite SENECA FOODS and Boiron SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS position performs unexpectedly, Boiron 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 Boiron SA will offset losses from the drop in Boiron SA's long position.| SENECA FOODS vs. EIDESVIK OFFSHORE NK | SENECA FOODS vs. Sanyo Chemical Industries | SENECA FOODS vs. Sekisui Chemical Co | SENECA FOODS vs. CSSC Offshore Marine |
| Boiron SA vs. Superior Plus Corp | Boiron SA vs. SIVERS SEMICONDUCTORS AB | Boiron SA vs. NorAm Drilling AS | Boiron SA vs. Norsk Hydro ASA |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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