Correlation Between SENECA FOODS-A and W P

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

Diversification Opportunities for SENECA FOODS-A and W P

-0.24

Correlation Coefficient

SENECA FOODS-A  W P

Very good diversification

The 3 months correlation between SENECA and WPY is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and W P Carey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on W P Carey 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 W P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of W P Carey has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and W P go up and down completely randomly.

Pair Corralation between SENECA FOODS-A and W P

Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 2.23 times more return on investment than W P. However, SENECA FOODS-A is 2.23 times more volatile than W P Carey. It trades about 0.03 of its potential returns per unit of risk. W P Carey is currently generating about -0.03 per unit of risk. If you would invest  5,700  in SENECA FOODS A on October 4, 2024 and sell it today you would earn a total of  1,500  from holding SENECA FOODS A or generate 26.32% return on investment over 90 days.

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

SENECA FOODS A  vs.  W P Carey

SENECA FOODS A

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SENECA FOODS A are ranked lower than 16 (%) 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.

W P Carey

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days W P Carey has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, W P 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 W P

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

The idea behind SENECA FOODS A and W P Carey 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.