Correlation Between SENECA FOODS-A and CAL MAINE
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS-A and CAL MAINE 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 CAL MAINE 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 CAL MAINE FOODS, you can compare the effects of market volatilities on SENECA FOODS-A and CAL MAINE 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 CAL MAINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS-A and CAL MAINE.
Diversification Opportunities for SENECA FOODS-A and CAL MAINE
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SENECA and CAL is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and CAL MAINE FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAL MAINE FOODS 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 CAL MAINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAL MAINE FOODS has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and CAL MAINE go up and down completely randomly.
Pair Corralation between SENECA FOODS-A and CAL MAINE
Assuming the 90 days trading horizon SENECA FOODS-A is expected to generate 2.12 times less return on investment than CAL MAINE. In addition to that, SENECA FOODS-A is 1.45 times more volatile than CAL MAINE FOODS. It trades about 0.02 of its total potential returns per unit of risk. CAL MAINE FOODS is currently generating about 0.07 per unit of volatility. If you would invest 4,798 in CAL MAINE FOODS on September 3, 2024 and sell it today you would earn a total of 4,342 from holding CAL MAINE FOODS or generate 90.5% 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. CAL MAINE FOODS
Performance |
| Timeline |
| SENECA FOODS A |
| CAL MAINE FOODS |
SENECA FOODS-A and CAL MAINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS-A and CAL MAINE
The main advantage of trading using opposite SENECA FOODS-A and CAL MAINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS-A position performs unexpectedly, CAL MAINE 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 CAL MAINE will offset losses from the drop in CAL MAINE's long position.| SENECA FOODS-A vs. TOTAL GABON | SENECA FOODS-A vs. Walgreens Boots Alliance | SENECA FOODS-A vs. Peak Resources Limited |
| CAL MAINE vs. LG Display Co | CAL MAINE vs. USWE SPORTS AB | CAL MAINE vs. SINGAPORE AIRLINES | CAL MAINE vs. VIAPLAY GROUP AB |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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