Correlation Between SENECA FOODS-A and CN RAILWAY

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

Diversification Opportunities for SENECA FOODS-A and CN RAILWAY

0.0

Correlation Coefficient

SENECA FOODS-A  CN RAILWAY

Pay attention - limited upside

The 3 months correlation between SENECA and 4FF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and CN RAILWAY S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN RAILWAY S and SENECA FOODS-A 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 CN RAILWAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN RAILWAY S has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and CN RAILWAY go up and down completely randomly.

Pair Corralation between SENECA FOODS-A and CN RAILWAY

If you would invest  5,500  in SENECA FOODS A on October 10, 2024 and sell it today you would earn a total of  1,550  from holding SENECA FOODS A or generate 28.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

SENECA FOODS A  vs.  CN RAILWAY S

SENECA FOODS A

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SENECA FOODS A are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, SENECA FOODS-A exhibited solid returns over the last few months and may actually be approaching a breakup point.

CN RAILWAY S

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CN RAILWAY S has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, CN RAILWAY is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SENECA FOODS-A and CN RAILWAY

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

The idea behind SENECA FOODS A and CN RAILWAY S 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.