Correlation Between FORMPIPE SOFTWARE and SENECA FOODS

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

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

Diversification Opportunities for FORMPIPE SOFTWARE and SENECA FOODS

0.55

Correlation Coefficient

FORMPIPE SOFTWARE  SENECA FOODS

Very weak diversification

The 3 months correlation between FORMPIPE and SENECA is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding FORMPIPE SOFTWARE AB 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 FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE AB 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 FORMPIPE SOFTWARE i.e., FORMPIPE SOFTWARE and SENECA FOODS go up and down completely randomly.

Pair Corralation between FORMPIPE SOFTWARE and SENECA FOODS

Assuming the 90 days horizon FORMPIPE SOFTWARE AB is expected to under-perform the SENECA FOODS. In addition to that, FORMPIPE SOFTWARE is 1.04 times more volatile than SENECA FOODS A. It trades about -0.11 of its total potential returns per unit of risk. SENECA FOODS A is currently generating about 0.28 per unit of volatility. If you would invest  6,500  in SENECA FOODS A on September 29, 2024 and sell it today you would earn a total of  800.00  from holding SENECA FOODS A or generate 12.31% return on investment over 90 days.

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

FORMPIPE SOFTWARE AB  vs.  SENECA FOODS A

FORMPIPE SOFTWARE

Risk-Adjusted Performance

0 of 100

Very Weak

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

SENECA FOODS A

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SENECA FOODS A are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile 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 FORMPIPE SOFTWARE and SENECA FOODS

The main advantage of trading using opposite FORMPIPE SOFTWARE and SENECA FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE AB 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.