Correlation Between SENECA FOODS and CBRE GROUP
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS and CBRE GROUP 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 CBRE GROUP 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 CBRE GROUP A, you can compare the effects of market volatilities on SENECA FOODS and CBRE GROUP 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 CBRE GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS and CBRE GROUP.
Diversification Opportunities for SENECA FOODS and CBRE GROUP
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SENECA and CBRE is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and CBRE GROUP A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBRE GROUP A 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 CBRE GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBRE GROUP A has no effect on the direction of SENECA FOODS i.e., SENECA FOODS and CBRE GROUP go up and down completely randomly.
Pair Corralation between SENECA FOODS and CBRE GROUP
Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 1.19 times more return on investment than CBRE GROUP. However, SENECA FOODS is 1.19 times more volatile than CBRE GROUP A. It trades about 0.4 of its potential returns per unit of risk. CBRE GROUP A is currently generating about 0.08 per unit of risk. If you would invest 5,800 in SENECA FOODS A on September 12, 2024 and sell it today you would earn a total of 950.00 from holding SENECA FOODS A or generate 16.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
SENECA FOODS A vs. CBRE GROUP A
Performance |
| Timeline |
| SENECA FOODS A |
| CBRE GROUP A |
SENECA FOODS and CBRE GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS and CBRE GROUP
The main advantage of trading using opposite SENECA FOODS and CBRE GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS position performs unexpectedly, CBRE GROUP 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 CBRE GROUP will offset losses from the drop in CBRE GROUP'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 |
| CBRE GROUP vs. Entravision Communications | CBRE GROUP vs. Perdoceo Education | CBRE GROUP vs. Zoom Video Communications | CBRE GROUP vs. DEVRY EDUCATION GRP |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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