Correlation Between SENECA FOODS-A and Cleanaway Waste
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS-A and Cleanaway Waste 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 Cleanaway Waste 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 Cleanaway Waste Management, you can compare the effects of market volatilities on SENECA FOODS-A and Cleanaway Waste 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 Cleanaway Waste. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS-A and Cleanaway Waste.
Diversification Opportunities for SENECA FOODS-A and Cleanaway Waste
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SENECA and Cleanaway is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and Cleanaway Waste Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cleanaway Waste Mana 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 Cleanaway Waste. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cleanaway Waste Mana has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and Cleanaway Waste go up and down completely randomly.
Pair Corralation between SENECA FOODS-A and Cleanaway Waste
Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 1.59 times more return on investment than Cleanaway Waste. However, SENECA FOODS-A is 1.59 times more volatile than Cleanaway Waste Management. It trades about 0.03 of its potential returns per unit of risk. Cleanaway Waste Management is currently generating about 0.01 per unit of risk. If you would invest 5,400 in SENECA FOODS A on October 13, 2024 and sell it today you would earn a total of 1,650 from holding SENECA FOODS A or generate 30.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
SENECA FOODS A vs. Cleanaway Waste Management
Performance |
| Timeline |
| SENECA FOODS A |
| Cleanaway Waste Mana |
SENECA FOODS-A and Cleanaway Waste Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS-A and Cleanaway Waste
The main advantage of trading using opposite SENECA FOODS-A and Cleanaway Waste positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS-A position performs unexpectedly, Cleanaway Waste 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 Cleanaway Waste will offset losses from the drop in Cleanaway Waste's long position.| SENECA FOODS-A vs. PLAYMATES TOYS | SENECA FOODS-A vs. CarsalesCom | SENECA FOODS-A vs. Hochschild Mining plc | SENECA FOODS-A vs. QINGCI GAMES INC |
| Cleanaway Waste vs. Playmates Toys Limited | Cleanaway Waste vs. PLAYTECH | Cleanaway Waste vs. DENTSPLY SIRONA | Cleanaway Waste vs. ANGANG STEEL H |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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