Correlation Between Air Lease and TreeHouse Foods
Can any of the company-specific risk be diversified away by investing in both Air Lease and TreeHouse 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 Air Lease and TreeHouse Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and TreeHouse Foods, you can compare the effects of market volatilities on Air Lease and TreeHouse 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 Air Lease with a short position of TreeHouse Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and TreeHouse Foods.
Diversification Opportunities for Air Lease and TreeHouse Foods
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Air and TreeHouse is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and TreeHouse Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TreeHouse Foods and Air Lease 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 Air Lease are associated (or correlated) with TreeHouse Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TreeHouse Foods has no effect on the direction of Air Lease i.e., Air Lease and TreeHouse Foods go up and down completely randomly.
Pair Corralation between Air Lease and TreeHouse Foods
Assuming the 90 days trading horizon Air Lease is expected to generate 0.86 times more return on investment than TreeHouse Foods. However, Air Lease is 1.17 times less risky than TreeHouse Foods. It trades about 0.05 of its potential returns per unit of risk. TreeHouse Foods is currently generating about -0.02 per unit of risk. If you would invest 3,411 in Air Lease on August 28, 2024 and sell it today you would earn a total of 1,429 from holding Air Lease or generate 41.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. TreeHouse Foods
Performance |
| Timeline |
| Air Lease |
| TreeHouse Foods |
Air Lease and TreeHouse Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and TreeHouse Foods
The main advantage of trading using opposite Air Lease and TreeHouse Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, TreeHouse 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 TreeHouse Foods will offset losses from the drop in TreeHouse Foods' long position.| Air Lease vs. SENECA FOODS A | Air Lease vs. TreeHouse Foods | Air Lease vs. Transportadora de Gas | Air Lease vs. BII Railway Transportation |
| TreeHouse Foods vs. Superior Plus Corp | TreeHouse Foods vs. NMI Holdings | TreeHouse Foods vs. Origin Agritech | TreeHouse Foods vs. SIVERS SEMICONDUCTORS AB |
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 the Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |