Correlation Between SENECA FOODS-A and VIENNA INSURANCE

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

Diversification Opportunities for SENECA FOODS-A and VIENNA INSURANCE

0.17

Correlation Coefficient

SENECA FOODS-A  VIENNA INSURANCE

Average diversification

The 3 months correlation between SENECA and VIENNA is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and VIENNA INSURANCE GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIENNA INSURANCE 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 VIENNA INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIENNA INSURANCE has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and VIENNA INSURANCE go up and down completely randomly.

Pair Corralation between SENECA FOODS-A and VIENNA INSURANCE

Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 3.49 times more return on investment than VIENNA INSURANCE. However, SENECA FOODS-A is 3.49 times more volatile than VIENNA INSURANCE GR. It trades about 0.03 of its potential returns per unit of risk. VIENNA INSURANCE GR is currently generating about 0.08 per unit of risk. If you would invest  5,450  in SENECA FOODS A on October 11, 2024 and sell it today you would earn a total of  1,600  from holding SENECA FOODS A or generate 29.36% return on investment over 90 days.

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

SENECA FOODS A  vs.  VIENNA INSURANCE GR

SENECA FOODS A

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SENECA FOODS A are ranked lower than 14 (%) 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.

VIENNA INSURANCE

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VIENNA INSURANCE GR are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, VIENNA INSURANCE is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SENECA FOODS-A and VIENNA INSURANCE

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

The idea behind SENECA FOODS A and VIENNA INSURANCE GR 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 Transaction History module to view history of all your transactions and understand their impact on performance.