Correlation Between Coffee Holding and Treehouse Foods
Can any of the company-specific risk be diversified away by investing in both Coffee Holding 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 Coffee Holding and Treehouse Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coffee Holding Co and Treehouse Foods, you can compare the effects of market volatilities on Coffee Holding 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 Coffee Holding with a short position of Treehouse Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coffee Holding and Treehouse Foods.
Diversification Opportunities for Coffee Holding and Treehouse Foods
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coffee and Treehouse is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Coffee Holding Co and Treehouse Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Treehouse Foods and Coffee Holding 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 Coffee Holding Co 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 Coffee Holding i.e., Coffee Holding and Treehouse Foods go up and down completely randomly.
Pair Corralation between Coffee Holding and Treehouse Foods
Considering the 90-day investment horizon Coffee Holding Co is expected to generate 0.94 times more return on investment than Treehouse Foods. However, Coffee Holding Co is 1.06 times less risky than Treehouse Foods. It trades about 0.19 of its potential returns per unit of risk. Treehouse Foods is currently generating about -0.05 per unit of risk. If you would invest 309.00 in Coffee Holding Co on August 31, 2024 and sell it today you would earn a total of 44.00 from holding Coffee Holding Co or generate 14.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coffee Holding Co vs. Treehouse Foods
Performance |
| Timeline |
| Coffee Holding |
| Treehouse Foods |
Coffee Holding and Treehouse Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coffee Holding and Treehouse Foods
The main advantage of trading using opposite Coffee Holding and Treehouse Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coffee Holding 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.| Coffee Holding vs. Seneca Foods Corp | Coffee Holding vs. J J Snack | Coffee Holding vs. Aryzta AG PK | Coffee Holding vs. Lifeway Foods |
| Treehouse Foods vs. Lancaster Colony | Treehouse Foods vs. John B Sanfilippo | Treehouse Foods vs. Seneca Foods Corp | Treehouse Foods vs. Seneca Foods Corp |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |