Correlation Between Seneca Foods and J J

Can any of the company-specific risk be diversified away by investing in both Seneca Foods and J J 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 J J 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 J J Snack, you can compare the effects of market volatilities on Seneca Foods and J J 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 J J. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seneca Foods and J J.

Diversification Opportunities for Seneca Foods and J J

0.04

Correlation Coefficient

Seneca Foods  J J

Significant diversification

The 3 months correlation between Seneca and JJSF is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Seneca Foods Corp and J J Snack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J J Snack 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 J J. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J J Snack has no effect on the direction of Seneca Foods i.e., Seneca Foods and J J go up and down completely randomly.

Pair Corralation between Seneca Foods and J J

Assuming the 90 days horizon Seneca Foods Corp is expected to generate 122.36 times more return on investment than J J. However, Seneca Foods is 122.36 times more volatile than J J Snack. It trades about 0.15 of its potential returns per unit of risk. J J Snack is currently generating about 0.02 per unit of risk. If you would invest  6,090  in Seneca Foods Corp on August 30, 2024 and sell it today you would earn a total of  1,280  from holding Seneca Foods Corp or generate 21.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	57.14%
Values	Daily Returns

Seneca Foods Corp  vs.  J J Snack

Seneca Foods Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Seneca Foods Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. 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.

J J Snack

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in J J Snack are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, J J is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Seneca Foods and J J

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

The idea behind Seneca Foods Corp and J J Snack 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.