Correlation Between AEON METALS and SENECA FOODS

Can any of the company-specific risk be diversified away by investing in both AEON METALS 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 AEON METALS and SENECA FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AEON METALS LTD and SENECA FOODS A, you can compare the effects of market volatilities on AEON METALS 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 AEON METALS with a short position of SENECA FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEON METALS and SENECA FOODS.

Diversification Opportunities for AEON METALS and SENECA FOODS

0.0

Correlation Coefficient

AEON METALS  SENECA FOODS

Pay attention - limited upside

The 3 months correlation between AEON and SENECA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AEON METALS LTD and SENECA FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENECA FOODS A and AEON METALS 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 AEON METALS LTD 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 A has no effect on the direction of AEON METALS i.e., AEON METALS and SENECA FOODS go up and down completely randomly.

Pair Corralation between AEON METALS and SENECA FOODS

If you would invest  5,550  in SENECA FOODS A on October 25, 2024 and sell it today you would earn a total of  1,250  from holding SENECA FOODS A or generate 22.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

AEON METALS LTD  vs.  SENECA FOODS A

AEON METALS LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AEON METALS LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, AEON METALS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

SENECA FOODS A

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SENECA FOODS A are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, SENECA FOODS exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AEON METALS and SENECA FOODS

The main advantage of trading using opposite AEON METALS and SENECA FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEON METALS 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's long position.

The idea behind AEON METALS LTD and SENECA FOODS A 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.