Correlation Between SENECA FOODS-A and Yihai International
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS-A and Yihai International 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 Yihai International 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 Yihai International Holding, you can compare the effects of market volatilities on SENECA FOODS-A and Yihai International 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 Yihai International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS-A and Yihai International.
Diversification Opportunities for SENECA FOODS-A and Yihai International
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between SENECA and Yihai is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and Yihai International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yihai 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 Yihai International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yihai International has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and Yihai International go up and down completely randomly.
Pair Corralation between SENECA FOODS-A and Yihai International
Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 1.06 times more return on investment than Yihai International. However, SENECA FOODS-A is 1.06 times more volatile than Yihai International Holding. It trades about 0.11 of its potential returns per unit of risk. Yihai International Holding is currently generating about -0.45 per unit of risk. If you would invest 6,750 in SENECA FOODS A on October 12, 2024 and sell it today you would earn a total of 300.00 from holding SENECA FOODS A or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SENECA FOODS A vs. Yihai International Holding
Performance |
| Timeline |
| SENECA FOODS A |
| Yihai International |
SENECA FOODS-A and Yihai International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SENECA FOODS-A and Yihai International
The main advantage of trading using opposite SENECA FOODS-A and Yihai International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS-A position performs unexpectedly, Yihai International 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 Yihai International will offset losses from the drop in Yihai International's long position.| SENECA FOODS-A vs. Commonwealth Bank of | SENECA FOODS-A vs. Perdoceo Education | SENECA FOODS-A vs. Major Drilling Group | SENECA FOODS-A vs. American Public Education |
| Yihai International vs. COFCO Joycome Foods | Yihai International vs. SENECA FOODS A | Yihai International vs. MCEWEN MINING INC | Yihai International vs. EBRO FOODS |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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