Correlation Between Seneca Foods and Sharing Services

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

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

Diversification Opportunities for Seneca Foods and Sharing Services

-0.44

Correlation Coefficient

Seneca Foods  Sharing Services

Very good diversification

The 3 months correlation between Seneca and Sharing is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Seneca Foods Corp and Sharing Services Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sharing Services Global and Seneca Foods 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 Seneca Foods Corp are associated (or correlated) with Sharing Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sharing Services Global has no effect on the direction of Seneca Foods i.e., Seneca Foods and Sharing Services go up and down completely randomly.

Pair Corralation between Seneca Foods and Sharing Services

Assuming the 90 days horizon Seneca Foods Corp is expected to generate 0.1 times more return on investment than Sharing Services. However, Seneca Foods Corp is 10.13 times less risky than Sharing Services. It trades about 0.18 of its potential returns per unit of risk. Sharing Services Global is currently generating about -0.06 per unit of risk. If you would invest  6,013  in Seneca Foods Corp on September 5, 2024 and sell it today you would earn a total of  1,256  from holding Seneca Foods Corp or generate 20.89% return on investment over 90 days.

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

Seneca Foods Corp  vs.  Sharing Services Global

Seneca Foods Corp

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Seneca Foods Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting technical and fundamental indicators, Seneca Foods sustained solid returns over the last few months and may actually be approaching a breakup point.

Sharing Services Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sharing Services Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Seneca Foods and Sharing Services

The main advantage of trading using opposite Seneca Foods and Sharing Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seneca Foods position performs unexpectedly, Sharing Services 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 Sharing Services will offset losses from the drop in Sharing Services' long position.

The idea behind Seneca Foods Corp and Sharing Services Global 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.