Correlation Between SENECA FOODS and Mitsubishi
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS and Mitsubishi 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 Mitsubishi 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 Mitsubishi, you can compare the effects of market volatilities on SENECA FOODS and Mitsubishi 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 Mitsubishi. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS and Mitsubishi.
Diversification Opportunities for SENECA FOODS and Mitsubishi
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SENECA and Mitsubishi is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and Mitsubishi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi 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 Mitsubishi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsubishi has no effect on the direction of SENECA FOODS i.e., SENECA FOODS and Mitsubishi go up and down completely randomly.
Pair Corralation between SENECA FOODS and Mitsubishi
Assuming the 90 days trading horizon SENECA FOODS is expected to generate 1.15 times less return on investment than Mitsubishi. In addition to that, SENECA FOODS is 1.22 times more volatile than Mitsubishi. It trades about 0.03 of its total potential returns per unit of risk. Mitsubishi is currently generating about 0.04 per unit of volatility. If you would invest 1,073 in Mitsubishi on October 27, 2024 and sell it today you would earn a total of 427.00 from holding Mitsubishi or generate 39.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
SENECA FOODS A vs. Mitsubishi
Performance |
| Timeline |
| SENECA FOODS A |
| Mitsubishi |
SENECA FOODS and Mitsubishi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS and Mitsubishi
The main advantage of trading using opposite SENECA FOODS and Mitsubishi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS position performs unexpectedly, Mitsubishi 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 Mitsubishi will offset losses from the drop in Mitsubishi's long position.| SENECA FOODS vs. Apple Inc | SENECA FOODS vs. Apple Inc | SENECA FOODS vs. Apple Inc | SENECA FOODS vs. Apple Inc |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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