Correlation Between SENECA FOODS-A and WIMFARM SA

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

Diversification Opportunities for SENECA FOODS-A and WIMFARM SA

0.11

Correlation Coefficient

SENECA FOODS-A  WIMFARM SA

Average diversification

The 3 months correlation between SENECA and WIMFARM is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA EO 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 WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and WIMFARM SA go up and down completely randomly.

Pair Corralation between SENECA FOODS-A and WIMFARM SA

Assuming the 90 days trading horizon SENECA FOODS A is expected to generate 0.83 times more return on investment than WIMFARM SA. However, SENECA FOODS A is 1.21 times less risky than WIMFARM SA. It trades about 0.11 of its potential returns per unit of risk. WIMFARM SA EO is currently generating about 0.09 per unit of risk. If you would invest  7,550  in SENECA FOODS A on April 24, 2025 and sell it today you would earn a total of  1,000.00  from holding SENECA FOODS A or generate 13.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

SENECA FOODS A  vs.  WIMFARM SA EO

SENECA FOODS A

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SENECA FOODS A are ranked lower than 9 (%) 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.

WIMFARM SA EO

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WIMFARM SA EO are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, WIMFARM SA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SENECA FOODS-A and WIMFARM SA

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

The idea behind SENECA FOODS A and WIMFARM SA EO 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.