Correlation Between Seneca Foods and Yatsen Holding
Can any of the company-specific risk be diversified away by investing in both Seneca Foods and Yatsen Holding 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 Yatsen Holding 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 Yatsen Holding, you can compare the effects of market volatilities on Seneca Foods and Yatsen Holding 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 Yatsen Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seneca Foods and Yatsen Holding.
Diversification Opportunities for Seneca Foods and Yatsen Holding
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Seneca and Yatsen is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Seneca Foods Corp and Yatsen Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yatsen Holding 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 Yatsen Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yatsen Holding has no effect on the direction of Seneca Foods i.e., Seneca Foods and Yatsen Holding go up and down completely randomly.
Pair Corralation between Seneca Foods and Yatsen Holding
Assuming the 90 days horizon Seneca Foods Corp is expected to generate 0.91 times more return on investment than Yatsen Holding. However, Seneca Foods Corp is 1.1 times less risky than Yatsen Holding. It trades about 0.08 of its potential returns per unit of risk. Yatsen Holding is currently generating about -0.09 per unit of risk. If you would invest 7,980 in Seneca Foods Corp on December 1, 2024 and sell it today you would earn a total of 395.00 from holding Seneca Foods Corp or generate 4.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 33.33% |
Values | Daily Returns |
Seneca Foods Corp vs. Yatsen Holding
Performance |
Timeline |
Seneca Foods Corp |
Risk-Adjusted Performance
Modest
Weak | Strong |
Yatsen Holding |
Seneca Foods and Yatsen Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Seneca Foods and Yatsen Holding
The main advantage of trading using opposite Seneca Foods and Yatsen Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seneca Foods position performs unexpectedly, Yatsen Holding 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 Yatsen Holding will offset losses from the drop in Yatsen Holding's long position.Seneca Foods vs. Bridgford Foods | Seneca Foods vs. J J Snack | Seneca Foods vs. Central Garden Pet | Seneca Foods vs. Central Garden Pet |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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