Correlation Between SENECA FOODS and AURUBIS AG
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS and AURUBIS AG 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 AURUBIS AG 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 AURUBIS AG UNSPADR, you can compare the effects of market volatilities on SENECA FOODS and AURUBIS AG 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 AURUBIS AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS and AURUBIS AG.
Diversification Opportunities for SENECA FOODS and AURUBIS AG
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SENECA and AURUBIS is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and AURUBIS AG UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AURUBIS AG UNSPADR 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 A are associated (or correlated) with AURUBIS AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AURUBIS AG UNSPADR has no effect on the direction of SENECA FOODS i.e., SENECA FOODS and AURUBIS AG go up and down completely randomly.
Pair Corralation between SENECA FOODS and AURUBIS AG
Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 0.84 times more return on investment than AURUBIS AG. However, SENECA FOODS A is 1.2 times less risky than AURUBIS AG. It trades about 0.12 of its potential returns per unit of risk. AURUBIS AG UNSPADR is currently generating about 0.0 per unit of risk. If you would invest 6,750 in SENECA FOODS A on September 25, 2024 and sell it today you would earn a total of 350.00 from holding SENECA FOODS A or generate 5.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.45% |
Values | Daily Returns |
SENECA FOODS A vs. AURUBIS AG UNSPADR
Performance |
Timeline |
SENECA FOODS A |
AURUBIS AG UNSPADR |
SENECA FOODS and AURUBIS AG Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SENECA FOODS and AURUBIS AG
The main advantage of trading using opposite SENECA FOODS and AURUBIS AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS position performs unexpectedly, AURUBIS AG 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 AURUBIS AG will offset losses from the drop in AURUBIS AG's long position.SENECA FOODS vs. SPORTING | SENECA FOODS vs. Ribbon Communications | SENECA FOODS vs. Darden Restaurants | SENECA FOODS vs. NTG Nordic Transport |
AURUBIS AG vs. SENECA FOODS A | AURUBIS AG vs. Flowers Foods | AURUBIS AG vs. Western Copper and | AURUBIS AG vs. JJ SNACK 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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