Correlation Between SENECA FOODS-A and Pan Pacific

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

Diversification Opportunities for SENECA FOODS-A and Pan Pacific

0.0

Correlation Coefficient

SENECA FOODS-A  Pan Pacific

Pay attention - limited upside

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

Pair Corralation between SENECA FOODS-A and Pan Pacific

If you would invest  6,650  in SENECA FOODS A on October 8, 2024 and sell it today you would earn a total of  700.00  from holding SENECA FOODS A or generate 10.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	6.25%
Values	Daily Returns

SENECA FOODS A  vs.  Pan Pacific International

SENECA FOODS A

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SENECA FOODS A are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, SENECA FOODS-A exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pan Pacific International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pan Pacific International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Pan Pacific is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SENECA FOODS-A and Pan Pacific

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

The idea behind SENECA FOODS A and Pan Pacific International 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.