Correlation Between SENECA FOODS-A and FUYO GENERAL
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS-A and FUYO GENERAL 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 FUYO GENERAL 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 FUYO GENERAL LEASE, you can compare the effects of market volatilities on SENECA FOODS-A and FUYO GENERAL 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 FUYO GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS-A and FUYO GENERAL.
Diversification Opportunities for SENECA FOODS-A and FUYO GENERAL
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SENECA and FUYO is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and FUYO GENERAL LEASE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUYO GENERAL LEASE 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 FUYO GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUYO GENERAL LEASE has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and FUYO GENERAL go up and down completely randomly.
Pair Corralation between SENECA FOODS-A and FUYO GENERAL
Assuming the 90 days trading horizon SENECA FOODS A is expected to under-perform the FUYO GENERAL. In addition to that, SENECA FOODS-A is 1.57 times more volatile than FUYO GENERAL LEASE. It trades about -0.23 of its total potential returns per unit of risk. FUYO GENERAL LEASE is currently generating about -0.03 per unit of volatility. If you would invest 7,150 in FUYO GENERAL LEASE on November 7, 2024 and sell it today you would lose (50.00) from holding FUYO GENERAL LEASE or give up 0.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SENECA FOODS A vs. FUYO GENERAL LEASE
Performance |
| Timeline |
| SENECA FOODS A |
| FUYO GENERAL LEASE |
SENECA FOODS-A and FUYO GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS-A and FUYO GENERAL
The main advantage of trading using opposite SENECA FOODS-A and FUYO GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS-A position performs unexpectedly, FUYO GENERAL 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 FUYO GENERAL will offset losses from the drop in FUYO GENERAL's long position.| SENECA FOODS-A vs. DALATA HOTEL | SENECA FOODS-A vs. Siemens Healthineers AG | SENECA FOODS-A vs. HEALTHSTREAM | SENECA FOODS-A vs. INTERCONT HOTELS |
| FUYO GENERAL vs. Suntory Beverage Food | FUYO GENERAL vs. MTY Food Group | FUYO GENERAL vs. GREENX METALS LTD | FUYO GENERAL vs. GWILLI FOOD |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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