Correlation Between PICKN PAY and TreeHouse Foods

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both PICKN PAY 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 PICKN PAY and TreeHouse Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PICKN PAY STORES and TreeHouse Foods, you can compare the effects of market volatilities on PICKN PAY 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 PICKN PAY with a short position of TreeHouse Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICKN PAY and TreeHouse Foods.

Diversification Opportunities for PICKN PAY and TreeHouse Foods

PICKNTreeHouseDiversified AwayPICKNTreeHouseDiversified Away100%
0.15
  Correlation Coefficient

Average diversification

The 3 months correlation between PICKN and TreeHouse is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding PICKN PAY STORES and TreeHouse Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TreeHouse Foods and PICKN PAY 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 PICKN PAY STORES 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 PICKN PAY i.e., PICKN PAY and TreeHouse Foods go up and down completely randomly.

Pair Corralation between PICKN PAY and TreeHouse Foods

Assuming the 90 days trading horizon PICKN PAY STORES is expected to generate 0.86 times more return on investment than TreeHouse Foods. However, PICKN PAY STORES is 1.16 times less risky than TreeHouse Foods. It trades about 0.06 of its potential returns per unit of risk. TreeHouse Foods is currently generating about -0.22 per unit of risk. If you would invest  147.00  in PICKN PAY STORES on November 25, 2024 and sell it today you would earn a total of  3.00  from holding PICKN PAY STORES or generate 2.04% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

PICKN PAY STORES  vs.  TreeHouse Foods

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 05101520
JavaScript chart by amCharts 3.21.15PIK T4H
       Timeline  
PICKN PAY STORES 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in PICKN PAY STORES are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, PICKN PAY is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.41.451.51.551.6
TreeHouse Foods 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days TreeHouse Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb293031323334

PICKN PAY and TreeHouse Foods Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.86-5.14-3.41-1.69-0.02871.753.565.377.188.99 0.020.040.060.08
JavaScript chart by amCharts 3.21.15PIK T4H
       Returns  

Pair Trading with PICKN PAY and TreeHouse Foods

The main advantage of trading using opposite PICKN PAY and TreeHouse Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PICKN PAY 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.
The idea behind PICKN PAY STORES and TreeHouse Foods 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.
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

Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Global Correlations
Find global opportunities by holding instruments from different markets
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Equity Valuation
Check real value of public entities based on technical and fundamental data
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios