Correlation Between SENECA FOODS-A and United Airlines
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS-A and United Airlines 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 United Airlines 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 United Airlines Holdings, you can compare the effects of market volatilities on SENECA FOODS-A and United Airlines 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 United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS-A and United Airlines.
Diversification Opportunities for SENECA FOODS-A and United Airlines
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SENECA and United is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and United Airlines Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Airlines Holdings 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 United Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Airlines Holdings has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and United Airlines go up and down completely randomly.
Pair Corralation between SENECA FOODS-A and United Airlines
Assuming the 90 days trading horizon SENECA FOODS-A is expected to generate 1.39 times less return on investment than United Airlines. But when comparing it to its historical volatility, SENECA FOODS A is 1.19 times less risky than United Airlines. It trades about 0.35 of its potential returns per unit of risk. United Airlines Holdings is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 7,065 in United Airlines Holdings on August 27, 2024 and sell it today you would earn a total of 2,215 from holding United Airlines Holdings or generate 31.35% 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. United Airlines Holdings
Performance |
| Timeline |
| SENECA FOODS A |
| United Airlines Holdings |
SENECA FOODS-A and United Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS-A and United Airlines
The main advantage of trading using opposite SENECA FOODS-A and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS-A position performs unexpectedly, United Airlines 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 United Airlines will offset losses from the drop in United Airlines' long position.| SENECA FOODS-A vs. Apple Inc | SENECA FOODS-A vs. Apple Inc | SENECA FOODS-A vs. Apple Inc | SENECA FOODS-A vs. Microsoft |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |