Correlation Between Hain Celestial and Treehouse Foods
Can any of the company-specific risk be diversified away by investing in both Hain Celestial 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 Hain Celestial and Treehouse Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hain Celestial and Treehouse Foods, you can compare the effects of market volatilities on Hain Celestial 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 Hain Celestial with a short position of Treehouse Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hain Celestial and Treehouse Foods.
Diversification Opportunities for Hain Celestial and Treehouse Foods
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hain and Treehouse is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding The Hain Celestial and Treehouse Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Treehouse Foods and Hain Celestial 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 The Hain Celestial 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 Hain Celestial i.e., Hain Celestial and Treehouse Foods go up and down completely randomly.
Pair Corralation between Hain Celestial and Treehouse Foods
Given the investment horizon of 90 days The Hain Celestial is expected to generate 1.32 times more return on investment than Treehouse Foods. However, Hain Celestial is 1.32 times more volatile than Treehouse Foods. It trades about 0.0 of its potential returns per unit of risk. Treehouse Foods is currently generating about -0.04 per unit of risk. If you would invest 835.00 in The Hain Celestial on August 24, 2024 and sell it today you would lose (21.50) from holding The Hain Celestial or give up 2.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hain Celestial vs. Treehouse Foods
Performance |
| Timeline |
| Hain Celestial |
| Treehouse Foods |
Hain Celestial and Treehouse Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hain Celestial and Treehouse Foods
The main advantage of trading using opposite Hain Celestial and Treehouse Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hain Celestial 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.| Hain Celestial vs. J J Snack | Hain Celestial vs. Lancaster Colony | Hain Celestial vs. Treehouse Foods | Hain Celestial vs. Simply Good Foods |
| Treehouse Foods vs. Lancaster Colony | Treehouse Foods vs. John B Sanfilippo | Treehouse Foods vs. Seneca Foods Corp | Treehouse Foods vs. Post Holdings |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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