Correlation Between SENECA FOODS and VERU INC
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS and VERU INC 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 VERU INC 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 VERU INC DL 01, you can compare the effects of market volatilities on SENECA FOODS and VERU INC 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 VERU INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS and VERU INC.
Diversification Opportunities for SENECA FOODS and VERU INC
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SENECA and VERU is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and VERU INC DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VERU INC DL 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 VERU INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VERU INC DL has no effect on the direction of SENECA FOODS i.e., SENECA FOODS and VERU INC go up and down completely randomly.
Pair Corralation between SENECA FOODS and VERU INC
Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 0.47 times more return on investment than VERU INC. However, SENECA FOODS A is 2.15 times less risky than VERU INC. It trades about 0.03 of its potential returns per unit of risk. VERU INC DL 01 is currently generating about -0.03 per unit of risk. If you would invest 5,500 in SENECA FOODS A on September 21, 2024 and sell it today you would earn a total of 1,600 from holding SENECA FOODS A or generate 29.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SENECA FOODS A vs. VERU INC DL 01
Performance |
| Timeline |
| SENECA FOODS A |
| VERU INC DL |
SENECA FOODS and VERU INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS and VERU INC
The main advantage of trading using opposite SENECA FOODS and VERU INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS position performs unexpectedly, VERU INC 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 VERU INC will offset losses from the drop in VERU INC'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 |
| VERU INC vs. GFL ENVIRONM | VERU INC vs. SENECA FOODS A | VERU INC vs. FUYO GENERAL LEASE | VERU INC vs. Cal Maine Foods |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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