Correlation Between SENECA FOODS-A and Yue Da
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS-A and Yue Da 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 Yue Da 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 Yue Da International, you can compare the effects of market volatilities on SENECA FOODS-A and Yue Da 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 Yue Da. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS-A and Yue Da.
Diversification Opportunities for SENECA FOODS-A and Yue Da
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between SENECA and Yue is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and Yue Da International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yue Da International 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 Yue Da. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yue Da International has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and Yue Da go up and down completely randomly.
Pair Corralation between SENECA FOODS-A and Yue Da
Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 0.43 times more return on investment than Yue Da. However, SENECA FOODS A is 2.31 times less risky than Yue Da. It trades about 0.33 of its potential returns per unit of risk. Yue Da International is currently generating about -0.02 per unit of risk. If you would invest 5,550 in SENECA FOODS A on September 4, 2024 and sell it today you would earn a total of 1,200 from holding SENECA FOODS A or generate 21.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
SENECA FOODS A vs. Yue Da International
Performance |
| Timeline |
| SENECA FOODS A |
| Yue Da International |
SENECA FOODS-A and Yue Da Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS-A and Yue Da
The main advantage of trading using opposite SENECA FOODS-A and Yue Da positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS-A position performs unexpectedly, Yue Da 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 Yue Da will offset losses from the drop in Yue Da's long position.| SENECA FOODS-A vs. TOTAL GABON | SENECA FOODS-A vs. Walgreens Boots Alliance | SENECA FOODS-A vs. Peak Resources Limited |
| Yue Da vs. Astral Foods Limited | Yue Da vs. EBRO FOODS | Yue Da vs. Zijin Mining Group | Yue Da vs. SENECA FOODS A |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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