Correlation Between SENECA FOODS and Live Nation

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

By analyzing existing cross correlation between SENECA FOODS A and Live Nation Entertainment, you can compare the effects of market volatilities on SENECA FOODS and Live Nation 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 Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS and Live Nation.

Diversification Opportunities for SENECA FOODS and Live Nation

0.92

Correlation Coefficient

SENECA FOODS  Live Nation

Almost no diversification

The 3 months correlation between SENECA and Live is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and Live Nation Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Nation Entertainment 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 A are associated (or correlated) with Live Nation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Nation Entertainment has no effect on the direction of SENECA FOODS i.e., SENECA FOODS and Live Nation go up and down completely randomly.

Pair Corralation between SENECA FOODS and Live Nation

Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 0.93 times more return on investment than Live Nation. However, SENECA FOODS A is 1.07 times less risky than Live Nation. It trades about 0.37 of its potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.18 per unit of risk. If you would invest  6,050  in SENECA FOODS A on September 16, 2024 and sell it today you would earn a total of  800.00  from holding SENECA FOODS A or generate 13.22% return on investment over 90 days.

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

SENECA FOODS A  vs.  Live Nation Entertainment

SENECA FOODS A

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SENECA FOODS A are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, SENECA FOODS exhibited solid returns over the last few months and may actually be approaching a breakup point.

Live Nation Entertainment

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Live Nation Entertainment are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Live Nation reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SENECA FOODS and Live Nation

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

The idea behind SENECA FOODS A and Live Nation Entertainment 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 Commodity Directory module to find actively traded commodities issued by global exchanges.