Correlation Between SENECA FOODS-A and Intermediate Capital

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

Diversification Opportunities for SENECA FOODS-A and Intermediate Capital

0.14

Correlation Coefficient

SENECA FOODS-A  Intermediate Capital

Average diversification

The 3 months correlation between SENECA and Intermediate is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding SENECA FOODS A and Intermediate Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Capital 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 Intermediate Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Capital has no effect on the direction of SENECA FOODS-A i.e., SENECA FOODS-A and Intermediate Capital go up and down completely randomly.

Pair Corralation between SENECA FOODS-A and Intermediate Capital

Assuming the 90 days trading horizon SENECA FOODS-A is expected to generate 1.11 times less return on investment than Intermediate Capital. But when comparing it to its historical volatility, SENECA FOODS A is 1.07 times less risky than Intermediate Capital. It trades about 0.17 of its potential returns per unit of risk. Intermediate Capital Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,914  in Intermediate Capital Group on April 20, 2025 and sell it today you would earn a total of  506.00  from holding Intermediate Capital Group or generate 26.44% 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.  Intermediate Capital Group

SENECA FOODS A

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SENECA FOODS A are ranked lower than 13 (%) 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.

Intermediate Capital

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intermediate Capital Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Intermediate Capital unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SENECA FOODS-A and Intermediate Capital

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

The idea behind SENECA FOODS A and Intermediate Capital Group 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.