Correlation Between SENECA FOODS-A and TREE
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS-A and TREE 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 TREE 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 TREECOM, you can compare the effects of market volatilities on SENECA FOODS-A and TREE 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 TREE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS-A and TREE.
Diversification Opportunities for SENECA FOODS-A and TREE
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SENECA and TREE is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and TREECOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TREECOM 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 TREE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TREECOM has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and TREE go up and down completely randomly.
Pair Corralation between SENECA FOODS-A and TREE
Assuming the 90 days trading horizon SENECA FOODS A is expected to under-perform the TREE. But the stock apears to be less risky and, when comparing its historical volatility, SENECA FOODS A is 3.44 times less risky than TREE. The stock trades about -0.26 of its potential returns per unit of risk. The TREECOM is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,792 in TREECOM on November 3, 2024 and sell it today you would earn a total of 530.00 from holding TREECOM or generate 13.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SENECA FOODS A vs. TREECOM
Performance |
| Timeline |
| SENECA FOODS A |
| TREECOM |
SENECA FOODS-A and TREE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS-A and TREE
The main advantage of trading using opposite SENECA FOODS-A and TREE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS-A position performs unexpectedly, TREE 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 TREE will offset losses from the drop in TREE's long position.| SENECA FOODS-A vs. ecotel communication ag | SENECA FOODS-A vs. TELECOM ITALRISP ADR10 | SENECA FOODS-A vs. Hollywood Bowl Group | SENECA FOODS-A vs. Cars Inc |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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