Correlation Between BJs Wholesale and Seneca Foods
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale 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 BJs Wholesale and Seneca Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Wholesale Club and Seneca Foods Corp, you can compare the effects of market volatilities on BJs Wholesale 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 BJs Wholesale with a short position of Seneca Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and Seneca Foods.
Diversification Opportunities for BJs Wholesale and Seneca Foods
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BJs and Seneca is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club 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 BJs Wholesale 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 BJs Wholesale Club 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 BJs Wholesale i.e., BJs Wholesale and Seneca Foods go up and down completely randomly.
Pair Corralation between BJs Wholesale and Seneca Foods
Allowing for the 90-day total investment horizon BJs Wholesale is expected to generate 1.58 times less return on investment than Seneca Foods. But when comparing it to its historical volatility, BJs Wholesale Club is 1.07 times less risky than Seneca Foods. It trades about 0.07 of its potential returns per unit of risk. Seneca Foods Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 7,337 in Seneca Foods Corp on December 1, 2024 and sell it today you would earn a total of 783.00 from holding Seneca Foods Corp or generate 10.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
BJs Wholesale Club vs. Seneca Foods Corp
Performance |
Timeline |
BJs Wholesale Club |
Seneca Foods Corp |
BJs Wholesale and Seneca Foods Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BJs Wholesale and Seneca Foods
The main advantage of trading using opposite BJs Wholesale and Seneca Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale 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.BJs Wholesale vs. Dollar Tree | BJs Wholesale vs. Dicks Sporting Goods | BJs Wholesale vs. Williams Sonoma | BJs Wholesale vs. Dillards |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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