Correlation Between SENECA FOODS-A and Goldman Sachs

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

Diversification Opportunities for SENECA FOODS-A and Goldman Sachs

0.58

Correlation Coefficient

SENECA FOODS-A  Goldman Sachs

Very weak diversification

The 3 months correlation between SENECA and Goldman is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and The Goldman Sachs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and Goldman Sachs go up and down completely randomly.

Pair Corralation between SENECA FOODS-A and Goldman Sachs

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	Moves Together
Strength	Weak
Accuracy	0.2%
Values	Daily Returns

SENECA FOODS A  vs.  The Goldman Sachs

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.

Goldman Sachs

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days The Goldman Sachs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak basic indicators, Goldman Sachs reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SENECA FOODS-A and Goldman Sachs

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

The idea behind SENECA FOODS A and The Goldman Sachs 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.