Correlation Between SENECA FOODS and REINET INVESTMENTS
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS and REINET INVESTMENTS 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 REINET INVESTMENTS 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 REINET INVESTMENTS SCA, you can compare the effects of market volatilities on SENECA FOODS and REINET INVESTMENTS 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 REINET INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS and REINET INVESTMENTS.
Diversification Opportunities for SENECA FOODS and REINET INVESTMENTS
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SENECA and REINET is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and REINET INVESTMENTS SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REINET INVESTMENTS SCA 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 REINET INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REINET INVESTMENTS SCA has no effect on the direction of SENECA FOODS i.e., SENECA FOODS and REINET INVESTMENTS go up and down completely randomly.
Pair Corralation between SENECA FOODS and REINET INVESTMENTS
Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 0.82 times more return on investment than REINET INVESTMENTS. However, SENECA FOODS A is 1.22 times less risky than REINET INVESTMENTS. It trades about 0.09 of its potential returns per unit of risk. REINET INVESTMENTS SCA is currently generating about 0.02 per unit of risk. If you would invest 4,620 in SENECA FOODS A on September 24, 2024 and sell it today you would earn a total of 2,630 from holding SENECA FOODS A or generate 56.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SENECA FOODS A vs. REINET INVESTMENTS SCA
Performance |
Timeline |
SENECA FOODS A |
REINET INVESTMENTS SCA |
SENECA FOODS and REINET INVESTMENTS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SENECA FOODS and REINET INVESTMENTS
The main advantage of trading using opposite SENECA FOODS and REINET INVESTMENTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS position performs unexpectedly, REINET INVESTMENTS 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 REINET INVESTMENTS will offset losses from the drop in REINET INVESTMENTS's long position.SENECA FOODS vs. National Beverage Corp | SENECA FOODS vs. PT Indofood Sukses | SENECA FOODS vs. Food Life Companies | SENECA FOODS vs. TYSON FOODS A |
REINET INVESTMENTS vs. Vastned Retail NV | REINET INVESTMENTS vs. SENECA FOODS A | REINET INVESTMENTS vs. Austevoll Seafood ASA | REINET INVESTMENTS vs. RETAIL FOOD GROUP |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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