Correlation Between Overseas Shipholding and Seneca Foods

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Can any of the company-specific risk be diversified away by investing in both Overseas Shipholding and Seneca Foods 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 Overseas Shipholding and Seneca Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Overseas Shipholding Group and Seneca Foods Corp, you can compare the effects of market volatilities on Overseas Shipholding and Seneca Foods 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 Overseas Shipholding with a short position of Seneca Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Overseas Shipholding and Seneca Foods.

Diversification Opportunities for Overseas Shipholding and Seneca Foods

-0.63
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Overseas and Seneca is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Overseas Shipholding Group and Seneca Foods Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seneca Foods Corp and Overseas Shipholding 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 Overseas Shipholding Group are associated (or correlated) with Seneca Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seneca Foods Corp has no effect on the direction of Overseas Shipholding i.e., Overseas Shipholding and Seneca Foods go up and down completely randomly.

Pair Corralation between Overseas Shipholding and Seneca Foods

Considering the 90-day investment horizon Overseas Shipholding Group is expected to generate 1.06 times more return on investment than Seneca Foods. However, Overseas Shipholding is 1.06 times more volatile than Seneca Foods Corp. It trades about 0.09 of its potential returns per unit of risk. Seneca Foods Corp is currently generating about 0.08 per unit of risk. If you would invest  183.00  in Overseas Shipholding Group on September 5, 2022 and sell it today you would earn a total of  109.00  from holding Overseas Shipholding Group or generate 59.56% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy99.6%
ValuesDaily Returns

Overseas Shipholding Group  vs.  Seneca Foods Corp

 Performance (%) 
       Timeline  
Overseas Shipholding 
Overseas Performance
0 of 100
Over the last 90 days Overseas Shipholding Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Overseas Price Channel

Seneca Foods Corp 
Seneca Performance
12 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Seneca Foods Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Seneca Foods sustained solid returns over the last few months and may actually be approaching a breakup point.

Seneca Price Channel

Overseas Shipholding and Seneca Foods Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Overseas Shipholding and Seneca Foods

The main advantage of trading using opposite Overseas Shipholding and Seneca Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Overseas Shipholding position performs unexpectedly, Seneca Foods 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 Seneca Foods will offset losses from the drop in Seneca Foods' long position.
Overseas Shipholding vs. Enterprise Products Partners
The idea behind Overseas Shipholding Group and Seneca Foods Corp 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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Check out your portfolio center. 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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