Correlation Between SENECA FOODS and Griffon
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS and Griffon 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 Griffon 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 Griffon, you can compare the effects of market volatilities on SENECA FOODS and Griffon 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 Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS and Griffon.
Diversification Opportunities for SENECA FOODS and Griffon
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SENECA and Griffon is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon 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 Griffon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Griffon has no effect on the direction of SENECA FOODS i.e., SENECA FOODS and Griffon go up and down completely randomly.
Pair Corralation between SENECA FOODS and Griffon
Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 1.31 times more return on investment than Griffon. However, SENECA FOODS is 1.31 times more volatile than Griffon. It trades about 0.19 of its potential returns per unit of risk. Griffon is currently generating about -0.25 per unit of risk. If you would invest 6,650 in SENECA FOODS A on September 23, 2024 and sell it today you would earn a total of 600.00 from holding SENECA FOODS A or generate 9.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SENECA FOODS A vs. Griffon
Performance |
| Timeline |
| SENECA FOODS A |
| Griffon |
SENECA FOODS and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS and Griffon
The main advantage of trading using opposite SENECA FOODS and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS position performs unexpectedly, Griffon 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 Griffon will offset losses from the drop in Griffon's long position.| SENECA FOODS vs. Apple Inc | SENECA FOODS vs. Apple Inc | SENECA FOODS vs. Apple Inc | SENECA FOODS vs. Apple Inc |
| Griffon vs. ASSOC BR FOODS | Griffon vs. SENECA FOODS A | Griffon vs. Astral Foods Limited | Griffon vs. Evolution Mining Limited |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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