Correlation Between Seneca Foods and Thorne HealthTech

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

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

Diversification Opportunities for Seneca Foods and Thorne HealthTech

0.7

Correlation Coefficient

Seneca Foods  Thorne HealthTech

Poor diversification

The 3 months correlation between Seneca and Thorne is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Seneca Foods Corp and Thorne HealthTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thorne HealthTech and Seneca Foods 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 Corp are associated (or correlated) with Thorne HealthTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thorne HealthTech has no effect on the direction of Seneca Foods i.e., Seneca Foods and Thorne HealthTech go up and down completely randomly.

Pair Corralation between Seneca Foods and Thorne HealthTech

If you would invest  6,160  in Seneca Foods Corp on September 22, 2024 and sell it today you would earn a total of  1,487  from holding Seneca Foods Corp or generate 24.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

Seneca Foods Corp  vs.  Thorne HealthTech

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 fragile technical and fundamental indicators, Seneca Foods sustained solid returns over the last few months and may actually be approaching a breakup point.

Thorne HealthTech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thorne HealthTech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Thorne HealthTech is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Seneca Foods and Thorne HealthTech

The main advantage of trading using opposite Seneca Foods and Thorne HealthTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seneca Foods position performs unexpectedly, Thorne HealthTech 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 Thorne HealthTech will offset losses from the drop in Thorne HealthTech's long position.

The idea behind Seneca Foods Corp and Thorne HealthTech 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.