Correlation Between SENECA FOODS-A and Evolution Mining
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS-A and Evolution Mining 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 Evolution Mining 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 Evolution Mining Limited, you can compare the effects of market volatilities on SENECA FOODS-A and Evolution Mining 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 Evolution Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS-A and Evolution Mining.
Diversification Opportunities for SENECA FOODS-A and Evolution Mining
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SENECA and Evolution is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and Evolution Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Mining 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 Evolution Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Mining has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and Evolution Mining go up and down completely randomly.
Pair Corralation between SENECA FOODS-A and Evolution Mining
Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 1.21 times more return on investment than Evolution Mining. However, SENECA FOODS-A is 1.21 times more volatile than Evolution Mining Limited. It trades about 0.13 of its potential returns per unit of risk. Evolution Mining Limited is currently generating about 0.08 per unit of risk. If you would invest 5,850 in SENECA FOODS A on August 28, 2024 and sell it today you would earn a total of 750.00 from holding SENECA FOODS A or generate 12.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SENECA FOODS A vs. Evolution Mining Limited
Performance |
| Timeline |
| SENECA FOODS A |
| Evolution Mining |
SENECA FOODS-A and Evolution Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS-A and Evolution Mining
The main advantage of trading using opposite SENECA FOODS-A and Evolution Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS-A position performs unexpectedly, Evolution Mining 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 Evolution Mining will offset losses from the drop in Evolution Mining's long position.| SENECA FOODS-A vs. Apple Inc | SENECA FOODS-A vs. Apple Inc | SENECA FOODS-A vs. Microsoft | SENECA FOODS-A vs. Microsoft |
| Evolution Mining vs. Franco Nevada | Evolution Mining vs. Agnico Eagle Mines | Evolution Mining vs. Superior Plus Corp | Evolution Mining vs. NMI Holdings |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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