Correlation Between SENECA FOODS-A and LANDSEA HOMES

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

Diversification Opportunities for SENECA FOODS-A and LANDSEA HOMES

0.56

Correlation Coefficient

SENECA FOODS-A  LANDSEA HOMES

Very weak diversification

The 3 months correlation between SENECA and LANDSEA is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and LANDSEA HOMES P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LANDSEA HOMES P 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 LANDSEA HOMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LANDSEA HOMES P has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and LANDSEA HOMES go up and down completely randomly.

Pair Corralation between SENECA FOODS-A and LANDSEA HOMES

Assuming the 90 days trading horizon SENECA FOODS-A is expected to generate 7.44 times less return on investment than LANDSEA HOMES. But when comparing it to its historical volatility, SENECA FOODS A is 5.64 times less risky than LANDSEA HOMES. It trades about 0.11 of its potential returns per unit of risk. LANDSEA HOMES P is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  520.00  in LANDSEA HOMES P on April 24, 2025 and sell it today you would earn a total of  445.00  from holding LANDSEA HOMES P or generate 85.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	81.25%
Values	Daily Returns

SENECA FOODS A  vs.  LANDSEA HOMES P

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.

LANDSEA HOMES P

Risk-Adjusted Performance

Good

Over the last 90 days LANDSEA HOMES P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, LANDSEA HOMES reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SENECA FOODS-A and LANDSEA HOMES

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

The idea behind SENECA FOODS A and LANDSEA HOMES P 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.