Correlation Between SENECA FOODS and TFS FINANCIAL
Can any of the company-specific risk be diversified away by investing in both SENECA FOODS and TFS FINANCIAL 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 TFS FINANCIAL 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 TFS FINANCIAL, you can compare the effects of market volatilities on SENECA FOODS and TFS FINANCIAL 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 TFS FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SENECA FOODS and TFS FINANCIAL.
Diversification Opportunities for SENECA FOODS and TFS FINANCIAL
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SENECA and TFS is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and TFS FINANCIAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFS FINANCIAL 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 TFS FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TFS FINANCIAL has no effect on the direction of SENECA FOODS i.e., SENECA FOODS and TFS FINANCIAL go up and down completely randomly.
Pair Corralation between SENECA FOODS and TFS FINANCIAL
Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 1.97 times more return on investment than TFS FINANCIAL. However, SENECA FOODS is 1.97 times more volatile than TFS FINANCIAL. It trades about 0.11 of its potential returns per unit of risk. TFS FINANCIAL is currently generating about -0.44 per unit of risk. If you would invest 6,750 in SENECA FOODS A on September 24, 2024 and sell it today you would earn a total of 350.00 from holding SENECA FOODS A or generate 5.19% 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. TFS FINANCIAL
Performance |
Timeline |
SENECA FOODS A |
TFS FINANCIAL |
SENECA FOODS and TFS FINANCIAL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SENECA FOODS and TFS FINANCIAL
The main advantage of trading using opposite SENECA FOODS and TFS FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SENECA FOODS position performs unexpectedly, TFS FINANCIAL 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 TFS FINANCIAL will offset losses from the drop in TFS FINANCIAL's long position.SENECA FOODS vs. National Beverage Corp | SENECA FOODS vs. PT Indofood Sukses | SENECA FOODS vs. Food Life Companies | SENECA FOODS vs. TYSON FOODS A |
TFS FINANCIAL vs. Lery Seafood Group | TFS FINANCIAL vs. MUTUIONLINE | TFS FINANCIAL vs. Carsales | TFS FINANCIAL vs. SENECA FOODS A |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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