Correlation Between REINET INVESTMENTS and SENECA FOODS-A

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

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

Diversification Opportunities for REINET INVESTMENTS and SENECA FOODS-A

0.17

Correlation Coefficient

REINET INVESTMENTS  SENECA FOODS-A

Average diversification

The 3 months correlation between REINET and SENECA is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding REINET INVESTMENTS SCA 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 REINET INVESTMENTS 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 REINET INVESTMENTS SCA are associated (or correlated) with SENECA FOODS-A. 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 REINET INVESTMENTS i.e., REINET INVESTMENTS and SENECA FOODS-A go up and down completely randomly.

Pair Corralation between REINET INVESTMENTS and SENECA FOODS-A

Assuming the 90 days horizon REINET INVESTMENTS SCA is expected to generate 0.96 times more return on investment than SENECA FOODS-A. However, REINET INVESTMENTS SCA is 1.04 times less risky than SENECA FOODS-A. It trades about 0.04 of its potential returns per unit of risk. SENECA FOODS A is currently generating about 0.03 per unit of risk. If you would invest  1,707  in REINET INVESTMENTS SCA on October 3, 2024 and sell it today you would earn a total of  773.00  from holding REINET INVESTMENTS SCA or generate 45.28% return on investment over 90 days.

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

REINET INVESTMENTS SCA  vs.  SENECA FOODS A

REINET INVESTMENTS SCA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in REINET INVESTMENTS SCA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, REINET INVESTMENTS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 uncertain technical and fundamental indicators, SENECA FOODS-A exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with REINET INVESTMENTS and SENECA FOODS-A

The main advantage of trading using opposite REINET INVESTMENTS and SENECA FOODS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REINET INVESTMENTS position performs unexpectedly, SENECA FOODS-A 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-A will offset losses from the drop in SENECA FOODS-A's long position.

The idea behind REINET INVESTMENTS SCA 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.