Correlation Between SENECA FOODS-A and Mueller Industries
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS-A and Mueller Industries 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 Mueller Industries 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 Mueller Industries, you can compare the effects of market volatilities on SENECA FOODS-A and Mueller Industries 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 Mueller Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS-A and Mueller Industries.
Diversification Opportunities for SENECA FOODS-A and Mueller Industries
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SENECA and Mueller is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and Mueller Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mueller Industries 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 Mueller Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mueller Industries has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and Mueller Industries go up and down completely randomly.
Pair Corralation between SENECA FOODS-A and Mueller Industries
Assuming the 90 days trading horizon SENECA FOODS-A is expected to generate 1.47 times less return on investment than Mueller Industries. But when comparing it to its historical volatility, SENECA FOODS A is 1.28 times less risky than Mueller Industries. It trades about 0.08 of its potential returns per unit of risk. Mueller Industries is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,160 in Mueller Industries on October 16, 2024 and sell it today you would earn a total of 3,290 from holding Mueller Industries or generate 79.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SENECA FOODS A vs. Mueller Industries
Performance |
| Timeline |
| SENECA FOODS A |
| Mueller Industries |
SENECA FOODS-A and Mueller Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS-A and Mueller Industries
The main advantage of trading using opposite SENECA FOODS-A and Mueller Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS-A position performs unexpectedly, Mueller Industries 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 Mueller Industries will offset losses from the drop in Mueller Industries' long position.| SENECA FOODS-A vs. SILICON LABORATOR | SENECA FOODS-A vs. United Rentals | SENECA FOODS-A vs. X FAB Silicon Foundries | SENECA FOODS-A vs. TIANDE CHEMICAL |
| Mueller Industries vs. Alfa Financial Software | Mueller Industries vs. Magic Software Enterprises | Mueller Industries vs. GBS Software AG | Mueller Industries vs. Sunny Optical Technology |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |