Correlation Between SENECA FOODS-A and Blackstone

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

Diversification Opportunities for SENECA FOODS-A and Blackstone

0.62

Correlation Coefficient

SENECA FOODS-A  Blackstone

Poor diversification

The 3 months correlation between SENECA and Blackstone is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group 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 Blackstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Group has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and Blackstone go up and down completely randomly.

Pair Corralation between SENECA FOODS-A and Blackstone

Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 1.15 times more return on investment than Blackstone. However, SENECA FOODS-A is 1.15 times more volatile than Blackstone Group. It trades about 0.17 of its potential returns per unit of risk. Blackstone Group is currently generating about 0.1 per unit of risk. If you would invest  5,500  in SENECA FOODS A on October 23, 2024 and sell it today you would earn a total of  1,350  from holding SENECA FOODS A or generate 24.55% return on investment over 90 days.

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

SENECA FOODS A  vs.  Blackstone Group

SENECA FOODS A

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SENECA FOODS A are ranked lower than 13 (%) 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.

Blackstone Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Blackstone reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SENECA FOODS-A and Blackstone

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

The idea behind SENECA FOODS A and Blackstone Group 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.