Correlation Between Sanyo Chemical and SENECA FOODS
Can any of the company-specific risk be diversified away by investing in both Sanyo Chemical and SENECA FOODS 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 Sanyo Chemical and SENECA FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanyo Chemical Industries and SENECA FOODS A, you can compare the effects of market volatilities on Sanyo Chemical and SENECA FOODS 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 Sanyo Chemical with a short position of SENECA FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanyo Chemical and SENECA FOODS.
Diversification Opportunities for Sanyo Chemical and SENECA FOODS
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sanyo and SENECA is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Sanyo Chemical Industries and SENECA FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENECA FOODS A and Sanyo Chemical 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 Sanyo Chemical Industries are associated (or correlated) with SENECA FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENECA FOODS A has no effect on the direction of Sanyo Chemical i.e., Sanyo Chemical and SENECA FOODS go up and down completely randomly.
Pair Corralation between Sanyo Chemical and SENECA FOODS
Assuming the 90 days horizon Sanyo Chemical is expected to generate 4.58 times less return on investment than SENECA FOODS. But when comparing it to its historical volatility, Sanyo Chemical Industries is 1.76 times less risky than SENECA FOODS. It trades about 0.05 of its potential returns per unit of risk. SENECA FOODS A is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5,100 in SENECA FOODS A on September 21, 2024 and sell it today you would earn a total of 2,000 from holding SENECA FOODS A or generate 39.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanyo Chemical Industries vs. SENECA FOODS A
Performance |
| Timeline |
| Sanyo Chemical Industries |
| SENECA FOODS A |
Sanyo Chemical and SENECA FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanyo Chemical and SENECA FOODS
The main advantage of trading using opposite Sanyo Chemical and SENECA FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanyo Chemical position performs unexpectedly, SENECA FOODS 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 SENECA FOODS will offset losses from the drop in SENECA FOODS's long position.| Sanyo Chemical vs. Albemarle | Sanyo Chemical vs. Superior Plus Corp | Sanyo Chemical vs. SIVERS SEMICONDUCTORS AB | Sanyo Chemical vs. Norsk Hydro ASA |
| SENECA FOODS vs. EIDESVIK OFFSHORE NK | SENECA FOODS vs. Sanyo Chemical Industries | SENECA FOODS vs. Sekisui Chemical Co | SENECA FOODS vs. CSSC Offshore Marine |
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.
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