Correlation Between Infrastrutture Wireless and SENECA FOODS-A

Can any of the company-specific risk be diversified away by investing in both Infrastrutture Wireless 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 Infrastrutture Wireless 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 Infrastrutture Wireless Italiane and SENECA FOODS A, you can compare the effects of market volatilities on Infrastrutture Wireless 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 Infrastrutture Wireless with a short position of SENECA FOODS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infrastrutture Wireless and SENECA FOODS-A.

Diversification Opportunities for Infrastrutture Wireless and SENECA FOODS-A

-0.82

Correlation Coefficient

Infrastrutture Wireless  SENECA FOODS-A

Pay attention - limited upside

The 3 months correlation between Infrastrutture and SENECA is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Infrastrutture Wireless Italia 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 Infrastrutture Wireless 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 Infrastrutture Wireless Italiane 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 Infrastrutture Wireless i.e., Infrastrutture Wireless and SENECA FOODS-A go up and down completely randomly.

Pair Corralation between Infrastrutture Wireless and SENECA FOODS-A

Assuming the 90 days horizon Infrastrutture Wireless Italiane is expected to under-perform the SENECA FOODS-A. But the stock apears to be less risky and, when comparing its historical volatility, Infrastrutture Wireless Italiane is 2.75 times less risky than SENECA FOODS-A. The stock trades about -0.15 of its potential returns per unit of risk. The SENECA FOODS A is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  5,250  in SENECA FOODS A on September 2, 2024 and sell it today you would earn a total of  1,200  from holding SENECA FOODS A or generate 22.86% return on investment over 90 days.

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

Infrastrutture Wireless Italia  vs.  SENECA FOODS A

Infrastrutture Wireless

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infrastrutture Wireless Italiane has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

SENECA FOODS A

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SENECA FOODS A are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile 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 Infrastrutture Wireless and SENECA FOODS-A

The main advantage of trading using opposite Infrastrutture Wireless and SENECA FOODS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infrastrutture Wireless 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 Infrastrutture Wireless Italiane 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.