Correlation Between SENECA FOODS-A and Ramsay Générale
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS-A and Ramsay Générale 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 Ramsay Générale 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 Ramsay Gnrale de, you can compare the effects of market volatilities on SENECA FOODS-A and Ramsay Générale 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 Ramsay Générale. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS-A and Ramsay Générale.
Diversification Opportunities for SENECA FOODS-A and Ramsay Générale
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SENECA and Ramsay is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and Ramsay Gnrale de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ramsay Gnrale de 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 Ramsay Générale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ramsay Gnrale de has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and Ramsay Générale go up and down completely randomly.
Pair Corralation between SENECA FOODS-A and Ramsay Générale
Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 1.33 times more return on investment than Ramsay Générale. However, SENECA FOODS-A is 1.33 times more volatile than Ramsay Gnrale de. It trades about 0.35 of its potential returns per unit of risk. Ramsay Gnrale de is currently generating about -0.38 per unit of risk. If you would invest 5,550 in SENECA FOODS A on August 27, 2024 and sell it today you would earn a total of 1,200 from holding SENECA FOODS A or generate 21.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SENECA FOODS A vs. Ramsay Gnrale de
Performance |
| Timeline |
| SENECA FOODS A |
| Ramsay Gnrale de |
SENECA FOODS-A and Ramsay Générale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS-A and Ramsay Générale
The main advantage of trading using opposite SENECA FOODS-A and Ramsay Générale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS-A position performs unexpectedly, Ramsay Générale 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 Ramsay Générale will offset losses from the drop in Ramsay Générale's long position.| SENECA FOODS-A vs. Apple Inc | SENECA FOODS-A vs. Apple Inc | SENECA FOODS-A vs. Apple Inc | SENECA FOODS-A vs. Microsoft |
| Ramsay Générale vs. Siamgas And Petrochemicals | Ramsay Générale vs. Performance Food Group | Ramsay Générale vs. SENECA FOODS A | Ramsay Générale vs. United Natural 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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