Correlation Between SENECA FOODS-A and GWILLI FOOD

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

Diversification Opportunities for SENECA FOODS-A and GWILLI FOOD

0.0

Correlation Coefficient

SENECA FOODS-A  GWILLI FOOD

Pay attention - limited upside

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

Pair Corralation between SENECA FOODS-A and GWILLI FOOD

Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 1.0 times more return on investment than GWILLI FOOD. However, SENECA FOODS-A is 1.0 times more volatile than GWILLI FOOD. It trades about 0.09 of its potential returns per unit of risk. GWILLI FOOD is currently generating about -0.06 per unit of risk. If you would invest  7,100  in SENECA FOODS A on December 21, 2024 and sell it today you would earn a total of  650.00  from holding SENECA FOODS A or generate 9.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SENECA FOODS A  vs.  GWILLI FOOD

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 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, SENECA FOODS-A may actually be approaching a critical reversion point that can send shares even higher in April 2025.

GWILLI FOOD

Risk-Adjusted Performance

Very Weak

Over the last 90 days GWILLI FOOD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with SENECA FOODS-A and GWILLI FOOD

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

The idea behind SENECA FOODS A and GWILLI FOOD 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .