Correlation Between SENECA FOODS-A and RETAIL FOOD
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS-A and RETAIL FOOD 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 RETAIL FOOD 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 RETAIL FOOD GROUP, you can compare the effects of market volatilities on SENECA FOODS-A and RETAIL FOOD 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 RETAIL FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS-A and RETAIL FOOD.
Diversification Opportunities for SENECA FOODS-A and RETAIL FOOD
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SENECA and RETAIL is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and RETAIL FOOD GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RETAIL FOOD GROUP 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 RETAIL FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RETAIL FOOD GROUP has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and RETAIL FOOD go up and down completely randomly.
Pair Corralation between SENECA FOODS-A and RETAIL FOOD
Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 1.08 times more return on investment than RETAIL FOOD. However, SENECA FOODS-A is 1.08 times more volatile than RETAIL FOOD GROUP. It trades about 0.28 of its potential returns per unit of risk. RETAIL FOOD GROUP is currently generating about 0.21 per unit of risk. If you would invest 5,500 in SENECA FOODS A on September 1, 2024 and sell it today you would earn a total of 950.00 from holding SENECA FOODS A or generate 17.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SENECA FOODS A vs. RETAIL FOOD GROUP
Performance |
| Timeline |
| SENECA FOODS A |
| RETAIL FOOD GROUP |
SENECA FOODS-A and RETAIL FOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS-A and RETAIL FOOD
The main advantage of trading using opposite SENECA FOODS-A and RETAIL FOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS-A position performs unexpectedly, RETAIL FOOD 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 RETAIL FOOD will offset losses from the drop in RETAIL FOOD's long position.| SENECA FOODS-A vs. SIVERS SEMICONDUCTORS AB | SENECA FOODS-A vs. Darden Restaurants | SENECA FOODS-A vs. Reliance Steel Aluminum | SENECA FOODS-A vs. Q2M Managementberatung AG |
| RETAIL FOOD vs. Gamma Communications plc | RETAIL FOOD vs. Entravision Communications | RETAIL FOOD vs. COMBA TELECOM SYST | RETAIL FOOD vs. Computer And Technologies |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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