Correlation Between Koios Beverage and Seneca Foods

Can any of the company-specific risk be diversified away by investing in both Koios Beverage 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 Koios Beverage and Seneca Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Koios Beverage Corp and Seneca Foods Corp, you can compare the effects of market volatilities on Koios Beverage 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 Koios Beverage with a short position of Seneca Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koios Beverage and Seneca Foods.

Diversification Opportunities for Koios Beverage and Seneca Foods

-0.67

Correlation Coefficient

Koios Beverage  Seneca Foods

Excellent diversification

The 3 months correlation between Koios and Seneca is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Koios Beverage Corp and Seneca Foods Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seneca Foods Corp and Koios Beverage 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 Koios Beverage Corp 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 Corp has no effect on the direction of Koios Beverage i.e., Koios Beverage and Seneca Foods go up and down completely randomly.

Pair Corralation between Koios Beverage and Seneca Foods

Assuming the 90 days horizon Koios Beverage Corp is expected to generate 19.47 times more return on investment than Seneca Foods. However, Koios Beverage is 19.47 times more volatile than Seneca Foods Corp. It trades about 0.05 of its potential returns per unit of risk. Seneca Foods Corp is currently generating about 0.18 per unit of risk. If you would invest  30.00  in Koios Beverage Corp on September 22, 2024 and sell it today you would lose (28.60) from holding Koios Beverage Corp or give up 95.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Koios Beverage Corp  vs.  Seneca Foods Corp

Koios Beverage Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Koios Beverage Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Koios Beverage reported solid returns over the last few months and may actually be approaching a breakup point.

Seneca Foods Corp

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Seneca Foods Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Seneca Foods sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Koios Beverage and Seneca Foods

The main advantage of trading using opposite Koios Beverage and Seneca Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koios Beverage 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' long position.

The idea behind Koios Beverage Corp and Seneca Foods Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.