Correlation Between SENECA FOODS and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS and Burlington Stores 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 Burlington Stores 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 Burlington Stores, you can compare the effects of market volatilities on SENECA FOODS and Burlington Stores 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 Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS and Burlington Stores.
Diversification Opportunities for SENECA FOODS and Burlington Stores
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SENECA and Burlington is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores 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 Burlington Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burlington Stores has no effect on the direction of SENECA FOODS i.e., SENECA FOODS and Burlington Stores go up and down completely randomly.
Pair Corralation between SENECA FOODS and Burlington Stores
Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 1.48 times more return on investment than Burlington Stores. However, SENECA FOODS is 1.48 times more volatile than Burlington Stores. It trades about 0.14 of its potential returns per unit of risk. Burlington Stores is currently generating about 0.12 per unit of risk. If you would invest 5,250 in SENECA FOODS A on August 29, 2024 and sell it today you would earn a total of 1,350 from holding SENECA FOODS A or generate 25.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SENECA FOODS A vs. Burlington Stores
Performance |
| Timeline |
| SENECA FOODS A |
| Burlington Stores |
SENECA FOODS and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS and Burlington Stores
The main advantage of trading using opposite SENECA FOODS and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS position performs unexpectedly, Burlington Stores 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 Burlington Stores will offset losses from the drop in Burlington Stores' long position.| SENECA FOODS vs. REGAL ASIAN INVESTMENTS | SENECA FOODS vs. Chuangs China Investments | SENECA FOODS vs. Methode Electronics | SENECA FOODS vs. LPKF Laser Electronics |
| Burlington Stores vs. ePlay Digital | Burlington Stores vs. Silicon Motion Technology | Burlington Stores vs. PLAY2CHILL SA ZY | Burlington Stores vs. Playa Hotels Resorts |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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