Correlation Between SENECA FOODS and PG E
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS and PG E 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 PG E 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 PG E P6, you can compare the effects of market volatilities on SENECA FOODS and PG E 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 PG E. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS and PG E.
Diversification Opportunities for SENECA FOODS and PG E
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SENECA and PCG6 is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and PG E P6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PG E P6 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 PG E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PG E P6 has no effect on the direction of SENECA FOODS i.e., SENECA FOODS and PG E go up and down completely randomly.
Pair Corralation between SENECA FOODS and PG E
Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 2.32 times more return on investment than PG E. However, SENECA FOODS is 2.32 times more volatile than PG E P6. It trades about 0.15 of its potential returns per unit of risk. PG E P6 is currently generating about 0.09 per unit of risk. If you would invest 5,250 in SENECA FOODS A on September 12, 2024 and sell it today you would earn a total of 1,450 from holding SENECA FOODS A or generate 27.62% 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. PG E P6
Performance |
| Timeline |
| SENECA FOODS A |
| PG E P6 |
SENECA FOODS and PG E Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS and PG E
The main advantage of trading using opposite SENECA FOODS and PG E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS position performs unexpectedly, PG E 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 PG E will offset losses from the drop in PG E's long position.| SENECA FOODS vs. Xenia Hotels Resorts | SENECA FOODS vs. COSTCO WHOLESALE CDR | SENECA FOODS vs. Hyatt Hotels | SENECA FOODS vs. Ross Stores |
| PG E vs. Ribbon Communications | PG E vs. Tower One Wireless | PG E vs. HANOVER INSURANCE | PG E vs. Safety Insurance Group |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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