Correlation Between Glanbia PLC and Seneca Foods
Can any of the company-specific risk be diversified away by investing in both Glanbia PLC 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 Glanbia PLC and Seneca Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glanbia PLC ADR and Seneca Foods Corp, you can compare the effects of market volatilities on Glanbia PLC 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 Glanbia PLC with a short position of Seneca Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glanbia PLC and Seneca Foods.
Diversification Opportunities for Glanbia PLC and Seneca Foods
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Glanbia and Seneca is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Glanbia PLC ADR 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 Glanbia PLC 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 Glanbia PLC ADR 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 Glanbia PLC i.e., Glanbia PLC and Seneca Foods go up and down completely randomly.
Pair Corralation between Glanbia PLC and Seneca Foods
If you would invest 6,144 in Seneca Foods Corp on September 28, 2024 and sell it today you would earn a total of 1,797 from holding Seneca Foods Corp or generate 29.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 4.0% |
Values | Daily Returns |
Glanbia PLC ADR vs. Seneca Foods Corp
Performance |
Timeline |
Glanbia PLC ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Seneca Foods Corp |
Glanbia PLC and Seneca Foods Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Glanbia PLC and Seneca Foods
The main advantage of trading using opposite Glanbia PLC and Seneca Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glanbia PLC 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.Glanbia PLC vs. Danone SA | ||
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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