Correlation Between Barfresh Food and Seneca Foods

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

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

Diversification Opportunities for Barfresh Food and Seneca Foods

0.3

Correlation Coefficient

Barfresh Food  Seneca Foods

Weak diversification

The 3 months correlation between Barfresh and Seneca is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Barfresh Food Group 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 Barfresh Food 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 Barfresh Food Group 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 Barfresh Food i.e., Barfresh Food and Seneca Foods go up and down completely randomly.

Pair Corralation between Barfresh Food and Seneca Foods

Given the investment horizon of 90 days Barfresh Food Group is expected to generate 3.66 times more return on investment than Seneca Foods. However, Barfresh Food is 3.66 times more volatile than Seneca Foods Corp. It trades about 0.09 of its potential returns per unit of risk. Seneca Foods Corp is currently generating about 0.13 per unit of risk. If you would invest  274.00  in Barfresh Food Group on December 29, 2024 and sell it today you would earn a total of  67.00  from holding Barfresh Food Group or generate 24.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Barfresh Food Group  vs.  Seneca Foods Corp

Barfresh Food Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Barfresh Food Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical and fundamental indicators, Barfresh Food demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Seneca Foods Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Seneca Foods Corp are ranked lower than 10 (%) 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 Barfresh Food and Seneca Foods

The main advantage of trading using opposite Barfresh Food and Seneca Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barfresh Food 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 Barfresh Food Group 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.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.