Correlation Between SENECA FOODS-A and Byggmax Group

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

Diversification Opportunities for SENECA FOODS-A and Byggmax Group

0.49

Correlation Coefficient

SENECA FOODS-A  Byggmax Group

Very weak diversification

The 3 months correlation between SENECA and Byggmax is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and Byggmax Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byggmax Group AB 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 Byggmax Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Byggmax Group AB has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and Byggmax Group go up and down completely randomly.

Pair Corralation between SENECA FOODS-A and Byggmax Group

Assuming the 90 days trading horizon SENECA FOODS-A is expected to generate 2.03 times less return on investment than Byggmax Group. But when comparing it to its historical volatility, SENECA FOODS A is 1.26 times less risky than Byggmax Group. It trades about 0.08 of its potential returns per unit of risk. Byggmax Group AB is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  386.00  in Byggmax Group AB on December 23, 2024 and sell it today you would earn a total of  71.00  from holding Byggmax Group AB or generate 18.39% return on investment over 90 days.

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

SENECA FOODS A  vs.  Byggmax Group AB

SENECA FOODS A

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SENECA FOODS A are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, SENECA FOODS-A may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Byggmax Group AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Byggmax Group AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Byggmax Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SENECA FOODS-A and Byggmax Group

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

The idea behind SENECA FOODS A and Byggmax Group AB 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.