Correlation Between SENECA FOODS-A and DICKS Sporting
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS-A and DICKS Sporting 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 DICKS Sporting 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 DICKS Sporting Goods, you can compare the effects of market volatilities on SENECA FOODS-A and DICKS Sporting 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 DICKS Sporting. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS-A and DICKS Sporting.
Diversification Opportunities for SENECA FOODS-A and DICKS Sporting
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between SENECA and DICKS is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and DICKS Sporting Goods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DICKS Sporting Goods 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 DICKS Sporting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DICKS Sporting Goods has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and DICKS Sporting go up and down completely randomly.
Pair Corralation between SENECA FOODS-A and DICKS Sporting
Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 0.89 times more return on investment than DICKS Sporting. However, SENECA FOODS A is 1.13 times less risky than DICKS Sporting. It trades about 0.07 of its potential returns per unit of risk. DICKS Sporting Goods is currently generating about 0.01 per unit of risk. If you would invest 5,350 in SENECA FOODS A on September 3, 2024 and sell it today you would earn a total of 1,100 from holding SENECA FOODS A or generate 20.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SENECA FOODS A vs. DICKS Sporting Goods
Performance |
| Timeline |
| SENECA FOODS A |
| DICKS Sporting Goods |
SENECA FOODS-A and DICKS Sporting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS-A and DICKS Sporting
The main advantage of trading using opposite SENECA FOODS-A and DICKS Sporting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS-A position performs unexpectedly, DICKS Sporting 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 DICKS Sporting will offset losses from the drop in DICKS Sporting's long position.| SENECA FOODS-A vs. TOTAL GABON | SENECA FOODS-A vs. Walgreens Boots Alliance | SENECA FOODS-A vs. Peak Resources Limited |
| DICKS Sporting vs. SPORT LISBOA E | DICKS Sporting vs. Eastman Chemical | DICKS Sporting vs. Gaztransport Technigaz SA | DICKS Sporting vs. ANTA SPORTS PRODUCT |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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