Correlation Between Whole Earth and Seneca Foods

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

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

Diversification Opportunities for Whole Earth and Seneca Foods

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Correlation Coefficient

Whole Earth  Seneca Foods

Pay attention - limited upside

The 3 months correlation between Whole and Seneca is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Whole Earth Brands 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 Whole Earth 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 Whole Earth Brands 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 Whole Earth i.e., Whole Earth and Seneca Foods go up and down completely randomly.

Pair Corralation between Whole Earth and Seneca Foods

Given the investment horizon of 90 days Whole Earth Brands is expected to under-perform the Seneca Foods. But the stock apears to be less risky and, when comparing its historical volatility, Whole Earth Brands is 18.7 times less risky than Seneca Foods. The stock trades about -0.03 of its potential returns per unit of risk. The Seneca Foods Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  5,081  in Seneca Foods Corp on October 8, 2024 and sell it today you would earn a total of  2,822  from holding Seneca Foods Corp or generate 55.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	72.83%
Values	Daily Returns

Whole Earth Brands  vs.  Seneca Foods Corp

Whole Earth Brands

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Whole Earth Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Whole Earth is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Seneca Foods Corp

Risk-Adjusted Performance

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Solid

Over the last 90 days Seneca Foods Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat unsteady 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 Whole Earth and Seneca Foods

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

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.