Correlation Between SENECA FOODS and Crown Castle

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

Diversification Opportunities for SENECA FOODS and Crown Castle

-0.73

Correlation Coefficient

SENECA FOODS  Crown Castle

Pay attention - limited upside

The 3 months correlation between SENECA and Crown is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and Crown Castle International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Castle Interna 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 Crown Castle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Castle Interna has no effect on the direction of SENECA FOODS i.e., SENECA FOODS and Crown Castle go up and down completely randomly.

Pair Corralation between SENECA FOODS and Crown Castle

Assuming the 90 days trading horizon SENECA FOODS A is expected to under-perform the Crown Castle. But the stock apears to be less risky and, when comparing its historical volatility, SENECA FOODS A is 1.0 times less risky than Crown Castle. The stock trades about -0.2 of its potential returns per unit of risk. The Crown Castle International is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  8,802  in Crown Castle International on October 25, 2024 and sell it today you would lose (82.00) from holding Crown Castle International or give up 0.93% of portfolio value over 90 days.

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

SENECA FOODS A  vs.  Crown Castle International

SENECA FOODS A

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SENECA FOODS A are ranked lower than 12 (%) 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.

Crown Castle Interna

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crown Castle International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with SENECA FOODS and Crown Castle

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

The idea behind SENECA FOODS A and Crown Castle International 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.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.